Teledesic backs away from satellite push

After twelve years and "hundreds of millions" of development dollars, high-speed satellite network company Teledesic is suspending activities and has gone into hibernation until the international markets pick up.

The first two satellites of the thirty-satellite constellation have been effectively abandoned in their Italian factory. In a statement, the company said that it wouldn't be prudent "to continue the substantial capital expenditures required to construct and launch the satellites consistent with the timing required to meet FCC and ITU regulatory milestones."

Teledesic's network, funded in part by Bill Gates, a Saudi prince and Boeing, was to have provided global Internet access and other digital services at speeds of up to 720mbps.

The original $9bn plans had called for 840 refrigerator-sized satellites in a dense, laser-linked mesh some 500 miles above the Earth by the year 2000. More recent and more sober plans had substantially downgraded the network, but in the end the commercial failure of other public-access systems such as Iridium at the height of the dot com boom made the success of Teledesic during the digital recession seem even more like science fiction.

"Our decision to suspend our activities results from an unprecedented confluence of events in the telecommunications industry and financial markets," said Craig McCaw, co-chief executive of Teledesic. His fellow co-chief executive William Owens added: "Teledesic's global licence for 1GHz of non-geostationary satellite spectrum with international ITU priority is widely viewed as a significant regulatory achievement that is not likely to be duplicated".

The company says it will now substantially reduce its staff as it evaluates what to do next.

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