This time in '99: Creditors give Iridium last minute reprieve

NEWS Beleaguered satellite mobile phone company Iridium, has sought a 60-day reprieve from its creditors, after claiming it does not have any cash. The company had boasted it would have 27,000 subscribers by the end of March, but financial results show that only 3,000 had signed up by January. The company has blamed a shortage of handsets for putting it behind schedule. But Tim Sheede, analyst at Ovum, was sceptical. "From what we've seen, they are not going to reach this target," he said. Sheede said Iridium's latest problem could be linked to another recent setback. "It is purely speculation, but the resignation of the chief financial officer (CFO) may be indicative of this fact," he said. Iridium's CFO, Roy Grant, is due to leave the company in April for 'personal reasons'. Grant was heavily involved in securing the first round of investment for the firm. Despite the company negotiating agreements with 140 countries for its satellite network, few providers actually offer the Iridium service. Sheede said: "Even though the service was launched on 1 November, most companies still do not offer a service. Most do not have the handsets or are making sure the service is compatible with what they are already offering with their GSM sets and software." A number of cancelled satellite launches have also taken their toll on the company's fortunes, forcing it to concentrate on the technology rather than on marketing its services. Sheede added: "Iridium will admit it has not done much marketing, but it claims there's a lot of demand without having to do a lot of advertising. It'll say the service providers will be flat out once they've got the handsets. "But it's a struggling company. The pricing model does not suit a lot of potential users. You can't ignore the technology problems it's been having. Ten years ago, this would have been a great idea. But these days, it's a there are doubts about that." Iridium was unable to provide current sales figures for handsets and customer accounts. It said it will release first quarter figures on 26 April.