McCaw Re-Examines Strategy For Teledesic ‘Sky Internet’

Mr. McCaw “is not going to have an easy time raising nine, 10, 20 billion if he focuses on going it alone,” Marco Caceres, senior space analyst with the Teal Group, Fairfax, Va., said. There has been speculation for weeks that Mr. McCaw might take a role in Iridium, because Motorola is the prime contractor and an investor in both projects. But any restructuring of Iridium would be complicated, requiring approval from banks, bondholders and the bankruptcy court. A Motorola spokesman said he knew of no discussions with Teledesic about Iridium and declined to comment further. Mr. Caceres said a partnership between Mr. McCaw and Hughes “seems very rational and makes more economic sense than messing with Iridium.” Hughes is an investor and contractor for ICO, and also plans its own satellite-Internet project, dubbed Spaceway, that is expected to launch in 2002. But it isn’t clear what Hughes would gain from such a deal, since Spaceway is ahead of most competitors. A partnership also could face regulatory hurdles.