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Iridium Japan's largest shareholder may close company

Telco DDI moots pulling out of satellite venture

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DDI, Japan's third-largest telco, threatened yesterday to shut down Iridium's Japanese operation, Nippon Iridium. The telco is Nippon Iridium's largest shareholder, owning 35.7 per cent of the company. Iridium itself own just 11.2 per cent of the Japanese business. Kyocera, which, with Motorola, makes Iridium handsets, owns ten per cent of the company. According to Reuters, Kyocera remains keen to continue supporting Nippon Iridium and has no plans to pull out of the business. Earlier this year, Motorola said it wouldn't bankroll Iridium any further, and since DDI is to Nippon Iridium what Motorola is to the troubled satellite comms venture as a whole, it's not surprising that it shares Motorola's concerns. Last September, DDI revealed its exposure to Nippon Iridium ran to the tune of Y25 billion ($230 million) through equity investments, loans, loan guarantees and business support guarantees. Nippon Iridium contributes around 4000 subscribers to the overall operation. A DDI spokesman said that if the company did pull the rug from under Nippon Iridium's feet, it would service those 4000 subscribers. It's not clear whether that would be through reselling Iridium's offerings itself, or simply by hooking them up through cellphone network IDO, with which DDI plans to merge next October. Presumably IDO has some decent roaming agreements with overseas networks -- the very facility that has rendered Iridium's service largely redundant. Presumably, Iridium would wish to retain those customers for itself but it's unlikely to be able to put together enough cash to buy DDI's stake in Nippon Iridium, even with Teledesic boss Craig McCaw's planned investment in the company. That could well persuade McCaw to dig deeper into his pockets. His plan is to build Teledesic, ICO Global Communications (which he now owns) and Iridium (which he's working on taking over) into a full-service satellite communications and broadband Internet networking operation, and with the Japanese leading the way in services that require high-speed satellite-based Net connections, such as Sony's 'PlayStation 2 as video on demand client' programme, maintaining a Japanese presence is essential. ® Related Stories Iridium to receive $75m from Teledesic's McCaw Mobile phone sales triple Motorola Q4 profit Kyocera buys Qualcomm Terrestrial

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