Iridium Goes Bankrupt and Ends Phone Service

Iridium World Communications Limited ended its phone service on March 17 after it failed to attract a buyer to save it from the auction block. The mobile phone company was unable to make payments on more than four billion US dollars in debt.

Iridium once promised to deliver wireless telephone service anywhere in the world, but ended up filing for bankruptcy in August 1999.

The prospect of final liquidation loomed after cellular communications pioneer Craig McCaw and his investment group pulled out of a plan to buy the company.

A judge gave the company permission to bring its 66 satellites, worth five-billion-dollars, back down to allow them to burn up in the atmosphere, a process that may begin in the next two weeks.

Meanwhile, the judge gave Iridium approval to spend 8 million US dollars to start closing its business, including giving severance pay to employees.

The service, which began in late 1998, stumbled out of the starting gate, and never got enough customers to make it viable. Critics said its phones, which cost as much as three thousand US dollars, were too bulky and required a separate antenna for use indoors or in cars.

Some 55-thousand Iridium customers are left with useless telephones. Iridium representatives in China are now considering ways to compensate more than nine-hundred Chinese customers. The compensation plan won't be known until next week.

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