Company said it was talking with several potential investors and would approach others later this month, but plan that could save company from liquidation was expected to be in place at least by Oct. because of time-sensitive nature of its cash position. It didn't rule out bankruptcy as option. "We've been saying for quite some time that we cannot rule out the possibility of bankruptcy," spokesman said. "It's not our preferred option by any means." |
Competitors Iridium and ICO already have been forced into bankruptcy, but recent investors have bought into both companies with hopes of reviving them, indication that demand for type of service still exists, officials said. Spokesman said Iridium faced much greater obstacles than Globalstar confronts. "They had a much higher cost structure," he said: "They had to have enormous revenues. Our system cost $3 billion to build, and it cost Iridium $6 to $7 billion. Their monthly operating costs were double or triple ours." Globalstar had 2nd quarter gross service revenue of $2.3 million, 13% over previous quarter. Net revenue, including royalties from phone sales and less discounts and promotions, was $1.8 million, up 21% over first quarter. Company said it had total of 5.4 million min. of use, including both mobile and fixed service, in 2nd quarter, 33% increase from previous quarter. Estimated number of mobile and fixed subscribers at end of June was 51,600, up 27% from previous quarter. |
In the days following the attacks, Iridium Satellite LLC and its main competitor, Globalstar, a division of the British mobile phone giant Vodafone Group plc, donated airtime and equipment to groups helping in recovery efforts. Both companies report that activations and airtime traffic have quadrupled since Sept. 11. Iridium Satellite, a privately held company based in Leesburg, Va., launched commercial service in March after an investment group acquired the assets of the bankrupt Motorola-backed entity called Iridium. The earlier iteration of Iridium filed for bankruptcy less than a year after launching business and threatened to let its satellites fall to earth before investors made a $25 million bid for the company's assets. Iridium Satellite now operates a constellation of 66 low-orbiting satellites that float about 475 miles above the earth's surface."Satellite Phones Increase In Popularity After Attacks," Wireless Week; By Deborah M ndez-Wilson; October 01, 2001; News; Pg. 15