Satellite News: Teledesic, Motorola, Boeing, Matra Marconi Space to Partner on `Internet-in-the-Sky' - Motorola Will Lead Global Industrial Team

EDGE, On & About AT&T, May 25, 1998

Teledesic LLC and Motorola Inc. Thursday announced they will become partners in the further development and deployment of Teledesic's global, broadband "Internet-in-the-Sky" satellite communications system. The Boeing Company, the world's leading aerospace company, and Matra Marconi Space, Europe's leading satellite manufacturer, will round out the team of founding industrial partners.

Motorola will be the prime contractor for the global technology team that will spearhead the engineering and construction of the world's first advanced telecommunications network to provide high-speed data connections to businesses, institutions and individuals everywhere on Earth - regardless of location. The team will combine the technical efforts now under way on the "Internet-in-the-Sky" system pioneered by Teledesic and the Celestri broadband satellite system conceived by Motorola.

"The globalization of this effort has begun in earnest. The strengths of these companies and their reach are completely complementary. They have all performed on a world stage and now will bring the technical framework of Teledesic into focus," said Craig McCaw, Teledesic's chairman and co-chief executive officer. "As we continue to expand our global team, we will clear the path to deliver the substantial benefits of connectivity to people throughout the world. We are very fortunate to be able to bring together the best people and the brightest ideas from our partners to help us build this system."

Motorola CEO Christopher Galvin said, "This is a natural fit of core competencies, know-how and vision. Rather than continuing along our separate paths, we're combining our best efforts to deliver a new generation of broadband communications services to people around the world."

McCaw, Galvin, Harry Stonecipher, Boeing's president and chief operating officer, and Armand Carlier, Matra Marconi Space's chairman and CEO, announced their companies' plans Thursday at a news conference in New York.

As a result of the agreement outlined today, Motorola will receive a 26 percent stake in Teledesic for a combination of cash and the value of design and development work that will be redirected from Celestri to the new joint effort. Motorola's total investment has a $750 million valuation. The boards of both companies have approved the plan.

"Chris Galvin has brought a refreshing world view to Motorola that places a new emphasis on collaboration and partnership," McCaw said. "I have long respected Motorola as a leading communications equipment manufacturer. Chris' personal commitment combined with Motorola's leadership in satellite communications makes Motorola the ideal partner."

McCaw has worked closely with Motorola for years, first as chairman of McCaw Cellular Communications Inc., which he sold to AT&T in 1994, and then at Nextel Communications Inc., where he is a primary shareholder. When McCaw and his family agreed to invest $1.1 billion in Nextel in April 1995, he began working with Galvin and the Motorola Land Mobile Products Sector team to dramatically enhance the technology that operates Nextel's nationwide digital wireless phone network, which served 1.6 million subscribers as of March 31.

"Our involvement with Craig and the Nextel team has evolved into a world-class association that has produced what is now the most advanced and fastest-growing digital wireless communications system in the world," Galvin said. "We will build on that relationship and on Craig's proven ability to attract capital to new technologies to channel Motorola's experience and expertise into the shared vision of an advanced global broadband `Internet-in-the-Sky.' In addition, we have long-standing admiration for and relationships with Boeing and Matra, and their presence on the team helps give us the confidence to make this significant investment."

Boeing's Stonecipher said, "We've been a longtime supporter of the Teledesic system and have worked with Motorola on the Iridium system. We think this joint effort makes a tremendous amount of sense and is a real winner. Commercial space is a key focus for the new Boeing, and Teledesic is a terrific business opportunity." In April 1997, Boeing committed to invest $100 million in Teledesic.

Matra Marconi Space's Carlier said, "A global system with global benefits deserves true global participation. As part of the original Celestri and now Teledesic's industrial team, we are committed to draw on the technological strengths of Europe to bring the benefits of the information age to the entire globe."

Motorola, based in Schaumburg, Ill., is one of the world's leading providers of wireless communications, semiconductors and advanced electronic systems and services. Motorola is prime contractor of Iridium LLC's 66-satellite global wireless personal communications network, which will offer voice, data, fax and paging services with a handheld telephone. (Teledesic will serve different markets by providing broadband communications services primarily to fixed users.) Other major equipment businesses include cellular telephone, two-way radio, paging and data communications, personal communications, automotive, defense and space electronics and computers. Communication devices, computers and millions of other products are powered by Motorola semiconductors. Motorola's 1997 sales were $29.8 billion.