Reviving Iridium

Background Note Contd...

The company appointed Edward F. Staiano as CEO and Vice Chairman. By 1997, Iridium launched 49 of the proposed 66 satellites successfully into the orbit. The same year, the company entered into strategic agreements with Kyocera to develop and market its wireless phones and with AlliedSignal to develop wireless telecommunication products for aircraft passengers and the crew. In the same year, Iridium came out with its IPO (Initial Public Offering) of $240 million and obtained $800 million in debt financing. In 1998, Iridium selected Sprint Telecenters⁷ to manage its global customer care centers.

The company also obtained an additional US $350 million by issuing high yield bonds. All the 66 satellites were successfully launched by November 1998 and Iridium then launched its global satellite phone paging services. 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.

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7] Sprint is a global communications company, which provides outsourced call center services for many Fortune 500
companies and multinational firms. It is the leader in advanced data communications services and also one of the
world's largest carriers of Internet traffic. Sprint entered into a long-term multi-million dollar contract with Iridium for
managing the of 24-hour customer service centers named Iridium Global Customer Care Centers.

Case Details

Case Code : BSTR031
Themes: Turnaround Strategy
Case Length : 11 Pages
Period : 1999-2001
Organization : Iridium LLC
Pub Date : 2002
Teaching Note : Available
Countries : USA
Industry : Telecommunication

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