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Companies to Partner on Satellites

March 15, 2001

SEATTLE (AP) _ Ellipso Inc. and New ICO, which acquired the assets of failed telecommunications venture ICO Global Communications Co. last year, will partner in an attempt to bring satellite-based mobile calling to the masses.

The announcement Wednesday followed a series of similar ventures that left other companies, including Globalstar and Iridium, severely crippled, with too few customers and too much debt.

But that’s not enough to dissuade Craig McCaw, chairman of the Kirkland, Wash.-based holding company ICO-Teledesic Global Limited.

``The mobile satellite industry has failed spectacularly in delivering on its promise to users,″ McCaw said in a statement announcing the partnership.

A spokesman for the holding company characterized the deal as an attempt to stabilize the much-rattled industry. He did not rule out a future merger between New ICO and Washington, D.C.-based Ellipso.

``There hasn’t really been a concerted effort to solve those problems that they’ve experienced,″ said spokesman Roger Nyhus.

That includes the cost of putting the satellites in orbit, and the challenge of getting customers interested in the system.

The system New ICO and Ellipso envision would essentially allow people to make mobile phone calls and send data anywhere in the world. The connection would rely on a satellite, rather than a land-based system, so rural areas could be just as connected as urban ones.

But as other companies have floundered for a lack of customer base, Nyhus admits that the key will be in making the service affordable.

``That’s one of the lessons that clearly we’ve learned from the others,″ he said.

McCaw is also the force behind Teledesic, a separate company that also is trying to make inroads in the broadband field. A merger between New ICO and Teledesic is pending approval by the Securities and Exchange Commission.

Both companies have invested hundreds of millions in the technology, and neither has successfully launched a satellite or turned a profit yet.

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