SCHAUMBURG, Ill. (Bloomberg) — Motorola Inc., the world's No. 2 cellular-telephone maker, said it planned to start destroying Iridium LLC's satellites Thursday because the satellite-phone company failed to attract a buyer for its assets.
Motorola, the founder of the Iridium system, notified the U.S. Bankruptcy Court for the Southern District of New York Tuesday it will begin taking the 66 satellites out of orbit on or after Aug. 24, said company spokesman Scott Wyman.
Iridium filed for Chapter 11 bankruptcy court protection last August after the $7 billion project failed to attract enough customers. The company's bulky phones cost as much as $3,000 and were considered unreliable. Motorola said in March it would maintain the Iridium system until a plan to take the satellites out of orbit is completed.
"We're putting together a final schedule to decommission the satellites," Wyman said.
Motorola had estimated it would take eight to nine months to destroy the satellites. They'll be guided back to earth and will burn themselves out in the atmosphere. The process was estimated to cost as much as $50 million.
Iridium, based in Washington, had attempted to sell its assets to Castle Harlan Inc. for $50 million, but negotiations collapsed in July after the investment firm concluded during a review that the project isn't capable of making money.
Iridium has no immediate comment on Motorola's action to destroy the satellites, said spokesman Tom Tuttle.