Airadigm in Recovery, but Where Are Its Licenses?

Bob Galle took over as Airadigm Communications CEO in July 1999 (www.airadigm.com). Two days later the C-block carrier filed for bankruptcy. It was business as usual for Galle, who makes a career of taking over under-performing companies and turning them around. But bankruptcy isn’t part of his typical game plan.

“Usually, I like to think that if I get hired in time, I can help,” he said.

More than two years into Galle’s tenure, things are looking up. The court approved Airadigm’s reorganization plan. All creditors received “100 cents on the dollar plus interest,” Galle said. The company met its 5-year build-out requirements. Subscribers increased from 10,000 in July 1999 to more than 34,000 today. And two investors emerged: Telephone and Data Systems (www.teldta.com) and TeleCorp (www.telecorppcs.com).

Just one roadblock remains, but it’s significant. The FCC (www.fcc.gov) pulled Airadigm’s licenses when it declared bankruptcy, and the situation remains complicated by the NextWave (www.nextwavetel.com) license debacle.

Airadigm petitioned the FCC to return its licenses in February 2000. “We said: We have subscribers, unlike NextWave. We built out, unlike NextWave. We didn’t sue you, unlike NextWave. What benefit is there in canceling Airadigm?” Galle said.

Yet Airadigm waits.

Galle’s average tenure on a job is 24 months, and he’s already exceeded that. He normally spends six to eight months getting a company stabilized and making money, six months raising capital and six to eight more months developing long-term strategies. Before Airadigm, Galle was a CEO of companies that produced furniture, watches and frozen food. A partner at crisis-management firm Grisanti, Galef & Goldress, he describes the partners as “lone rangers” who only go into a firm as the CEO, reporting to the board (www.gggcrisismanager.com).

When he comes to a company, people usually question how Galle can help them when he has no industry-specific experience. But the companies aren’t suffering because they do not understand industry specifics, he said.

“In all situations I’ve found a core of talented people at the company that knows the specifics about the business and knows what needs to be done, but for whatever reason, they’re not allowed to make that happen,” Galle said.

When you reach that core, you give people the responsibility and authority to make things happen, and that core talent drives the business forward.

At Airadigm, Galle first sat down and considered ways to increase sales, attack costs and build teamwork. A layoff reduced the workforce from 100 to 85.

“I let go a lot of people who had titles,” Galle said. He next move was to find a niche — prepaid — something the big carriers weren’t emphasizing. Today two-thirds of the customers are prepaid; plans are in the works to find a niche in postpaid. Despite Airadigm’s successes, some things are on hold, awaiting the FCC decision. An expensive E-911 software upgrade to Airadigm’s Ericsson (www.ericsson.com) switch is being delayed. Build-out will be limited. 3G is somewhere down the road. Galle hopes that things are settled soon for the sake of the people whom the carrier serves such as the Oneida Nation (www.oneida-nation.net), which owns 40% of the company, but especially for Airadigm employees.

“We’re playing with people’s lives,” he said. “Not Bob Galle’s life, but the other people whose lives are insecure because of this.”