ICO emerges from Chapter 11…
...only to be subsumed by Teledesic real soon now
Satellite networking company ICO Global Communications - or New ICO, as we're now supposed to call it - has thrown aside its Chapter 11 bankruptcy protection.
Actually, we're probably going to have to call it ICO Teledesic. As we predicted last year, having invested a pile of money - a cool $1.2 billion - into ICO, Teledesic boss Craig McCaw is now getting the companies ready to merge.
It works something like this: having unified his Teledesic and ICO assets under a single holding company, ICO-Teledesic Global (ICO-TG), itself a subsidiary of McCaw Eagle River Investments, McCaw last week persuaded Teledesic's board to approve merging Teledesic into ICO-TG. That merger is subject to regulatory and shareholder approval, but it's hard to see said bodies rejecting the proposal, especially since the next step is to merge New ICO into it too.
As we said, that effectively leaves the two companies as one. Both of them specialise in providing high bandwidth data networks via satellite - something Teledesic has always been focused on, but which ICO only got into last year after Iridium's troubles persuaded it that satellite-based mobile phone services weren't such a good idea after all - so a merger makes sense. It allows both to share resources and cut their costs. Building a satellite network is expensive enough without the two of them building two networks independently.
ICO is already hard at work on the conversion of its 12 cellphone satellites (ten for operational work, two as back-up units) into packed-based network hubs, and upgrading its ground installations. "The enhancements to the New ICO network have been made in its ground infrastructure, which will make it possible to upgrade and evolve the network over time and even to switch among different technologies in real-time," said ICO's acting CEO, Russell Daggatt.
The merger would also make life easier for McCaw, who is already chairman of ICO-TG, ICO and Teledesic. Why take three chairs into the shower, when you only need take one? ®