Iridium boldly going… nowhere
Q1 profits way down -- userbase a third of anticipated figure
Pity poor Iridium. A damn clever idea, this satellite-driven go-anywhere mobile phone service, but that hasn't helped company behind it attract a solid base of users. Or make money. In the first quarter of its current fiscal year, Iridium received revenues of $1.45 million, nowhere near enough to offset the company's loss of $505 million -- that's $300 million more down the pan compared to the same period last year. Iridium also release its latest subscription base figures, which showed just 10,294 people were using the system, the vast majority (7188) using the satellite service and the rest split 1:2 between cellular and paging customers. Company spokesman Leo Mondele said Iridium's focus from this point on centred upon sales and marketing. He was wary of making predictions on the success of the company's strategy here, an understandable response given Iridium's most recent projection reckoned it would have 27,000 subscribers and a turnover of $4 million by now. Clearly, it has quite some way to go here. Mondele also said Iridium was rethinking its service offerings and pricing plans the better to attract the significant demand the company believes there is for a satellite phone service. The company also reckons it will soon have its problems of limited handset availability solved thanks to Motorola's efforts to ramp up production. Motorola is, of course, Iridium's biggest shareholder, so you would expect it to take a keener interest than most. Indeed, said Mondele, it will be building a direct sales force to promote Iridium phones. Clearly it's worried by Iridium's own sales team, which even Iridium dismissed as "weak". Such efforts may help, but the company still has to face up to the negative impact of the abrupt departure of CEO Ed Staiano and the departing CFO Roy Grant (see Iridium CEO breaks orbit). High-level resignations won't aid its ongoing attempts to win the support of its bank, which has given it until the end of May to refinance its $800 million debt. "Clearly we have a great deal of work to do to improve our marketing, distribution and sales," said interim CEO John Richardson. Indeed. ®
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