The past has a way of catching up with you. Iridium, the satellite phone company, has been working hard to re-invent itself following its 1999 bankruptcy. Last September it returned to the stock market through a reverse takeover, and has set about raising money for a new fleet of low-earth orbiting satellites.
In the 1990s Iridium launched with the idea of selling satphones to a wide consumer market, but was soon overtaken by the mobile phone industry. It became chiefly a niche provider of phones to aid workers and the military.
Now, Matt Desch, chief executive, believes there could be a big new market to be exploited in tracking all sorts of objects, from trucks and cargo containers to polar bears, by satellite.
Iridium was hopeful of getting backing for the £2.7bn project from either the US or French export credit agency
Now there is a snag. One-time parent company Motorola, which spun out Iridium in 1998, is suing the company for “at least $24.68m”, related to old loan agreements between the two companies. More worryingly, Motorola could terminate crucial intellectual property licences for Iridium, which would make it impossible for the company to operate its satellite system.
Without usable IP, there will not be much point in building or launching the satellites, even if the money can be raised. Iridium says it is still in talks with Motorola to resolve the issue, but the case could well end up in court.
If this leads to delays, its terrible news. Iridium’s existing satellites are not getting any younger – they need to be replaced in the next four years or so – and other competitors such as Inmarsat, Orbcomm and Globalstar are planning rival services.
Iridium shares, which debuted at around $10 have now lost around 30 per cent of their value.
The Motorola issue demonstrates once again the dangers of the space industry. In orbit, the satellites are at risk of colliding with space junk – one Iridium satellite was taken out last year when it crashed with a defunct Russian satellite. On the ground, it risks being hit by the legal debris of its previous financial collapse.
