Iridium to cut call charges

Can Satellite service increase subscriber numbers in time?

Ailing satellite mobile phone service Iridium is expected to announce price cuts in a desperate attempt to ramp up its subscriber figures. The company has until 30 June to meet bank-set subscriber and revenue targets or face bankruptcy (see Iridium granted 30-day reprieve). The price cuts have already begun to emerge in the US -- this week Iridium distributor Seven Seas Communications introducted a flat-rate pricing plan of $4.29 per minute for international calls, down from $6, according to WiredNews -- and overseas distributors are expected to follow suit. That said, handsets are still retailing for a hefty $2000. That's significantly cheaper than their $3000 introductory price, but hardly one guaranteed to win customers in large numbers. Nor will the technical problems the company continues to face, claim industry observers. At the end of March, Iridium had just over 10,000 customers -- someway short of the 27,000 target it had set itself. The company's latest round of negotiations with creditors led to its agreement to hit that figure by the end of this month. Even taking into account some recently signed US government contracts, the phone company still has a long way to go. ® * Iridium distributor US Digital Communications this week announced its decision to cease offering the satellite phone service. "Due to the well-documented shortcomings of the Iridium satellite telephone platform, and the corresponding inability of the International Satellite Group's sales force to sell Iridium products and services in any meaningful amounts, we are forced to lay off our employees and wind down operations," said company chairman Robert Wussler.

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