Iridium dodges the burn

Former airline exec buys satellite system Before several prospective bidders came to the table to purchase the Iridium satellite system, Motorola was preparing to blow the satellites up. But when a U.S. Bankruptcy Court judge decided to let a group - led by former airline executive Dan Colussy - buy the system for $25 million, the tune changed for both Iridium and Motorola.

While the former probably avoids a fiery demise, the latter should walk away with a few extra bucks.

The company, to be called Iridium Satellite, will continue to provide commercial satellite communications to the U.S. government and re-launch satellite communications services within 60 days, according to a statement. The company will target industries that need satellite communications such as those operating in remote locations, including the military, maritime and aviation.

"They need to get a good plan before they go forward," said Greg Caressi, a research manager of the satellite communications group at Frost & Sullivan.

While this recent move did not seem to shock the industry, some analysts were surprised at the length of time it has taken to settle the Iridium deal.

"To me, the bigger surprise was how long it has taken, considering the [end] cost. The assets purchased are so cheap, most of the negotiating had to be around operational costs," Caressi said.

Colussy and his group could try to do something with low data rates, or Iridium Satellite could return to a plain voice plan, he said.

Because the satellite system has a limited data capability, Colussy's company might have to stick with voice service, said Andy Belt, an executive vice president for Adventis. "Voice is more of a horizontal play, and it is easier to go to market with it," he said.

For now, Colussy and his group most likely are contemplating whether the $25 million - though peanuts compared with the billions Iridium racked up in debt - would be money well spent.

"I am sure they are doing intense due diligence to make sure they can put forth a viable offering," Belt said.

Boeing must think so because it already has contracted with Iridium Satellite to operate and maintain the rescued satellite constellation.