ICO fails to achieve $600m funding target

NEWS ICO Global Communications last week said it has failed to raise $600m in financing from strategic investors only two weeks after being rebuffed by the wider investment community. The announcement came a day after news that Iridium - a rival mobile satellite services (MSS) provider - has defaulted on $1.5bn worth of loans, a situation that seriously calls into question the future of the Motorola-backed company. Analysts are now saying that Iridium's well-documented problems are making life harder for ICO and Globalstar - another MSS provider due to offer a service later this year. Tim Sheedy, IDC research analyst, European Wireless and Mobile Communications, said: "If Iridium wasn't around, ICO wouldn't have the same issues raising the finance. Iridium has scared the market, and if it goes bankrupt, there's a good chance the whole industry could go belly up." Tim Farrar, Analysys principal consultant, said: "Iridium has in no way tested if a market exists for the right service at the right price. It's hard to conclude anything from its experience." IDC's Sheedy maintains MSS providers do meet a demand, and said Globalstar and ICO are perhaps better positioned than Iridium, with more integrated and comprehensive service offerings. ICO has said it is now considering modifying its financing proposal so there's a lower minimum investment threshold and payments to suppliers can be deferred. Aerospace giant, Hughes, is one stakeholder and supplier which may trade deferred payments for a larger slice of ICO.