Iridium still hoping for suitor

How Iridium's phone system works

The bankrupt US satellite phone company Iridium is still hopeful of finding a buyer, according to its main backer, Motorola.

High-tech giant Motorola says Iridium has not yet destroyed its $6bn satellite network - and that there could now be a bidder after all.

In March, Iridium said it would have to send the satellites out of orbit to burn up in the Earth's atmosphere after it ran out of time to find a buyer.

But now Motorola president Robert Growney has said: "Hopefully very soon, we will see a new operator of Iridium emerge."

He said the 66 satellites that allow users to make calls anywhere around the world were still in orbit and functional.

Motorola's chairman, Chris Galvin, declined to give any further details or name potential buyers.

He said the bankruptcy court would make any decision on Iridium's future.

Huge debts

Iridium filed for bankruptcy protection last August after it failed to sign up enough subscribers and defaulted on more than $1.5bn in loans. At the time, it owed $4.4bn.

By filing, Iridium hoped to gain enough time to restructure and work out arrangements with its creditors.

Critics of the project have said it was too pricey and that Iridium misjudged the pace of expansion of cheaper land-based wireless phones.

Motorola owns about 18% of Iridium, which was once seen as having huge profit potential but has now cost its backer about $2bn.

Courtesy

In March, a Motorola spokesman said the decision to keep the service going temporarily was a courtesy to customers rather than a sign that Iridium might still be saved.

"We do not have a qualified bid," William Perlstein, a lawyer representing the debt-plagued company, had told the bankruptcy hearing in New York.

He said more than 80 parties had been contacted in a futile hunt for new investors.

The cost of maintaining the satellites - about $10m a month - means the network cannot be kept in orbit for very long.