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Teledesic raises more cash – but global broadband is still dream

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Teledesic has raised another $121 million from the Abu Dhabi Investment Company, owned by the Abu Dhabi Investment Authority and the National Bank of Abu Dhabi. This raises the total invested in Teledesic to around $1.5 billion. Deputy chairman Steven Norris of Satellite Holdings, one of the investing organisations in the ADIC funding, indicated his support for the Teledesic and ICO ventures, but gave no hint as to whether there might be a merger. The founding investors were Bill Gates and Craig McCaw, with strategic investments from Motorola ($750 million, and named as the primary contractor when it agreed to drop its own satellite plans), Saudi Prince Alaweed Bin Talal ($200 million), and Boeing ($100 million). The estimated cash requirement is $9 billion, but this must be as fluid as Teledesic's plans. When McCaw detailed the plan in 1994, there were to be 840 satellites, plus 88 spares, a figure that was included in the FCC licence in March 1997 (to be precise, only 84 spares were specified in the licence). The estimated cost of the polar-orbiting satellites is $5.5 million each, with launch costs of around $2.4 million each. The large number of satellites results from the need for a high angle of vision to avoid obstacles, since the high frequency Ka-band signals are stopped by trees or heavy rain. In 1996, the expectation was that the system would be operational in 2001. Early last year, the date had slipped to 2002, and there was a further slippage by last October to 2003. The current expectation is for 2004. A satellite spook who works in the Pentagon told us earlier this year that Teledesic had already lost 10 satellites because of mispositioning, and that there appeared to be some nasty problems yet to be solved. The number of satellites has been reduced to about a third of the original plan, to 288 plus spares, making the current expectation of around 300 satellites in total. This would preclude worldwide coverage with two satellites always in view, so the dream of global broadband is still a dream. ®

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