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Teledesic confirms Motorola support

Fears over Iridium-style mistakes calmed, apparently

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Motorola has been selected by Teledesic, the $9 billion satellite-based global data network developer, as its prime hardware supplier. Motorola remains a major stakeholder -- and debt guarantor -- of the troubled Iridium satellite-based cellphone network. That company's recent rough times had persuaded some pundits that Motorola might want to distance itself from similar projects. That said, the company does appear to have had some concerns about Teledesic, an operation backed in part by Bill Gates. Motorola's appointment as prime contractor follows its suspension of work on the project to hammer out technical differences, and it has raised concerns that the project will cost rather more than the $9 billion Teledesic is predicting. Indeed, the prime contractor deal will not become final until the two companies have completed a joint report into new cost projections and technical issues. Motorola has already pledged $750 million, in exchange for a 26 per cent stake in Teledesic, though that stake has since shrunk thanks to the arrival of other investors. Motorola clearly wants Teledesic to get it right and not make the same mistakes as Iridium -- primarily over the final cost of the project and its technology, both of which ultimately resulted in the service's poor subscriber figures. ® See also Iridium fires 80 staff Iridium to cut call charges Iridium granted 30-day reprieve

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