Reviving Iridium



Themes: Turnaround Strategy
Period : 1999-2001
Organization : Iridium LLC
Pub Date : 2002
Countries : USA
Industry : Telecommunication

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Case Code : BSTR031
Case Length : 11 Pages
Price: Rs. 300;

Reviving Iridium| Case Study

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Background Note Contd...

In 1999, Staiano resigned and John Richardson, the then CEO of Iridium Africa Corporation, was appointed the new CEO and Vice Chairman. Iridium's venture into the upcoming Mobile Satellite Services (MSS) market marked a new beginning in the field of personal communications. In the late 1990s, analysts expected MSS to grow significantly over the next few years. Thus, the company's pathbreaking services were being heralded as the technology that would change the face of the global telecommunications industry.

About Satellite Telephones

Satellite telephone systems work on the concept of wireless technology that uses individual radio frequencies to make and receive calls. These radio frequencies are used over and over again by dividing a service area into different geographic zones called 'cells,' with each cell having its own transmitter/receiver antenna. These cells could be as small as a building or as big as 50 km across.

When a customer makes a call on a wireless phone, the message is transmitted by low energy radio signals to the nearest antenna site, which is connected, to the local terrestrial phone networks. These messages are delivered to the receiver via phone lines if the call is made to a landline phone and by radio signals if the call is made to a wireless phone. Whenever a wireless phone user reaches the boundary of a cell the wireless network immediately senses that the signal is getting weak and automatically passes the call to the antenna of the cell into which the caller is travelling.

Customers can make/receive calls even when they are out of the accessible geographical area with the help of a wireless carrier. This facility is also known as roaming. The services that make use of wireless telephone technology are:

• Advanced Mobile Phone Service (AMPS): It is a cellular standard that transmits voice as FM radio signals. It is the most widely used system in the US.
• Code Division Multiple Access (CDMA): It is also known as the spread spectrum technology. CDMA uses a low-power signal that is spread across a wide bandwidth. Each phone call is assigned a code, which identifies it to the correct receiving phone. A large number of calls can be carried simultaneously on the same group of channels, by making use of the identifying code and a low-power signal.

• Time Division Multiple Access (TDMA): TDMA is a digital air interface technology designed to increase channel capacity by enabling it to handle simultaneous phone calls. Using TDMA, a signal is divided into pieces and each one is assigned to a different time (fraction of a second) slot. This increases channel capacity.
• Global System for Mobile Communications (GSM): This is a type of TDMA that has encryption8 features. GSM has become a standard in Europe and the US for mobile communications.
• Personal Communications Service (PCS): It is a completely digital, two-way, wireless telecommunications system specifically designed for the US metropolitan areas. PCS networks are CDMA, TDMA and global system for mobile communications (GSM).

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