McCaw keeps them guessing

Craig McCaw is known as a telecommunications pioneer who often plunges into uncharted territory leaving industry observers wondering why. The latest noise: He wants to buy Iridium. Combine Iridium with McCaw's current bid for ICO Global, and many envision that McCaw is fostering a big-picture satellite strategy.

Although one source close to McCaw said the alleged Iridium takeover plan is more dead than alive, McCaw might have good use for Iridium. Thomas Lehrman, co-chief executive of The Gerson Lehrman Group, believes that while ICO is valuable for its infrastructure, Iridium offers nothing more than scarce radio spectrum.

"McCaw is extremely bright and does not buy inefficient infrastructure unless it is cheap and he can find a way to get more spectrum," he said.

Lehrman believes McCaw's intention is to secure spectrum in the L-band - 10 MHz at 1.6 GHz - which is ideal for mobile applications.

If ICO and Iridium were combined, the spectrum could support twice as many users as Globalstar, which has a more limited spectrum, Lehrman said. In addition, merging the two companies could lower the cost to maintain the network, thus lowering unit cost.

"Because there is room for [only] one carrier in this market, it is good to consolidate," said Andrew Cole, vice president for Renaissance Worldwide. "I fear Iridium will not be able to come out of [bankruptcy] alone."