Iridium woes worsen

Satellite phone service Iridium admitted yesterday it does not expect to gain the number of subscribers it promised its investors it would attract. At the same time, the deeply troubled company hired investment bank Donaldson, Lufkin & Jenrette to advise it on cutting costs and restructuring its debt. Iridium has until the end of this month to refinance its whopping $800 million debt. The company may have found itself a new CFO on Wednesday -- the previous incumbent, Roy Grant, quit recently -- but its time is beginning to run out. It now appears that Iridium's two-month 'stay of execution', which put back the debt refinancing deadline to 31 May, was granted on the promise of the company achieving a certain number of subscribers. Those projections are unlikely to have been on the scale of the 27,000 the company was predicting last year to reach by this point, but it's clear they are not going to be met. At the end of March, Iridium had 10,294 subscribers, over 7100 of them using its satellite phone service. That figure is unlikely to have increased radically since then, not least because of the quick departure of CEO Ed Staiano and the company's poor Q1 results (see Iridium boldly going... nowhere?). Iridium is not releasing numbers, but it did say yesterday that "expected subscriber ramp-up and revenue generation" were "lower than expected". ®