By silicon.com, 30 October 2003 12:59
NEWS 30.10.98 Cambridge-based telco Ionica looks to have reached the end of the line after failing in a last-ditch attempt to secure extra funding. The firm has appointed PricewaterhouseCoopers and Ernst & Young as joint administrators.
Ionica, which has spent the last few months talking up its future while searching for investors, sought to break BT's stranglehold on the local loop by providing fixed wireless services, mainly to residential customers and small businesses.
Ionica representatives were not available for comment but a tape-recorded message at the company's headquarters said all suppliers and creditors will be contacted within the next 28 days. Over 1,000 staff are set to lose their jobs.
David Edmonds, Oftel's director general, said: "This is extremely disappointing news for Ionica's staff, its customers and its shareholders."
Ionica was once the darling stock of the UK telecoms and high-tech industries. The company floated just over 15 months ago at 390p per share, and the price soon peaked at 421p. However, the shares tumbled on the news that the company was having problems with network software, and that customers weren't being signed up as quickly as expected. On Monday, trading in Ionica shares was suspended at 17.5p.
30.10.03 And so it was that another alternative to established telco services - and another wireless venture to boot - foundered. Any trip to Ionica's gleaming HQ in Cambridge at that time showed the company's optimism but ultimately technological glitches and some poor marketing were its undoing. Opportunities for alternatives to BT and the cable operators still exist but this shows that infrastructure-based ventures - especially those working with not-completely-proven technology - are risky businesses. Ironically, the same day this story broke five years ago we saw the headline 'Iridium goes live' . Of course its offering was different, aimed at those wanting global, pole-to-pole coverage from remote locations and seas, but it was ultimately as ill-fated (though significantly more costly). For all the advances wireless will bring us today, it's worth remembering these cautionary tales.
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1. anonymous
I worked with Ionica just prior to their demise and I can confirm that I have not experienced such a smug, self satisfied, arrogant, ignorant bunch of individuals in all my years in the industry. Talk about bad management and business planning - lets get all those overheads (such as custom built offices and expensive managers) without any cash flow. They got what they diserved.