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Iridium Faces The Music
Washington - May 4, 1999 - Iridium has become the target of several class actions suites following a disastrous year for the mobile satellite phone provider. Analysts say a variety of factors including poor sales, satellite technical problems and a poor marketing campaign have combined to see investors slash the company's stock price crash from a high of $72 last May to less than $13 in recent days.

Law firms involved in the actions charge Iridium, certain officers of Iridium and Motorola, Inc. with violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 as well as Rule 10b-5 promulgated thereunder. The complaint alleges that defendants issued a series of materially false and misleading statements concerning the Company's ability to fully launch the Iridium System.

Specifically, during the Class Period, defendants falsely reported achievable subscriber numbers and projected revenue figures, failed to disclose the serious technical problems with the Iridium System, failed to disclose delays and shortages in necessary handset production, and that, absent achieving the requisite number of subscribers and revenue figures, the Company would violate certain covenants between itself and its lenders.

Law firms inviting Iridium shareholders to partake in the class action include various law firms;

Iridium is the world's first global LEO satellite phone and paging and launched retail services on Nov. 1, 1998. Via a network of 66, LEO birds combined with terrestrial cellular the system is touted as enabling subscribers to communicate virtually anywhere in the world using one phone and pager, one phone number and pay for it all through one monthly bill. Problem is the company has seen lacklustre sales that have potentially put the company in conflict with the terms of its lenders.

Last year a senior industry player told SpaceDaily that Iridium was an obsolete system that was built largely for defense department users.

Underscoring this sentiment is a further US government contract by the General Services Administration (GSA) with Motorola Worldwide Information Network Services for the supply of satellite handsets and pagers and ongoing Iridium services.

Valued at up to $52 million over a two-year period ending April 30, 2001, the contract will enable US government agencies, contractors associated with the federal government, and numerous organizations recognized by the US government to purchase Motorola Satellite Series (TM) portable satellite communications products and Iridium voice and paging services through the GSA.

"We are excited about the opportunity to work with GSA to help fulfill the communications needs of U.S. government organizations," said John Weidman, vice president of M-WINS. "We believe the Iridium system complements the existing government and commercial communications infrastructure and will provide the government with more options to efficiently carry out its day-to-day operations.

The GSA contract follows a Defense Information Systems Agency (DISA) contract with Motorola worth up to $219 million to provide Iridium services through its U.S. Government-dedicated Iridium gateway in Hawaii.

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