Sailors to use Iridium

Space junk redeemed

By Linda Harrison in New York • Get more from this author

Posted in Business, 9th December 2000 03:57 GMT

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A few more titbits have emerged on the Pentagon's deal to rescue Iridium.

The two-year agreement, signed on Wednesday between Iridium Satellite and the US Department of Defence (DoD), is worth $72 million. It will enable US government organisations such as the Navy and Drug Enforcement Administration to use the company's space-cruising phone system for secure voice communications.

In exchange for the $72 million, Iridium Satellite -- which is buying the carcass of Iridium from a bankruptcy court -- will provide unlimited use for up to 20,000 sat-phone wielding government workers.

The DoD can extend the contract until 2007, if it so desires, for $252 million.

Iridium hit troubles when its execs realised the $3,000 per-handset price tag and $7 per minute call charges were a little steep to make it a mass-market product. The Motorola-backed outfit filed for bankruptcy earlier this year.

The US government came up with the plan to curb possible public panic over pieces of satellites falling from space should the network have to be brought down. However, a government study declared that the risk to life would be within federal guidelines - a one in 10,000 chance of anyone being injured on the ground by dropping debris. ®