Gates and co pump $1bn into satellite firm

A group of investors led by Microsoft chairman Bill Gates has pumped $1bn into UK-based satellite communications company ICO-Teledesic Global.

The firm, which controls the satellite assets of US telecoms pioneer Craig McCaw, plans to launch IP-based mobile and fixed broadband services to global customers.

Gates, who originally founded Teledesic with McCaw in 1994, plans to invest $100m into ICO-Teledesic through his private investment vehicle, Cascade Investment. The rest of the fund will be provided by McCaw's own investment firm, Eagle River, and independent investment company Clayton, Dubilier & Rice.

ICO-Teledesic is in the process of merging with New ICO, the London-based satellite communications company formerly called ICO Global Communications which McCaw rescued from Chapter 11 bankruptcy protection last May.

Company officials said New ICO will offer the satellite equivalent of third-generation wireless services, including mobile voice, wireless web and other packet data services, to global customers in 2003. Teledesic, meanwhile, will offer IP-based services at the end of 2004.

The funding injects a much-needed boost to the satellite industry, which saw the demise of Iridium last March. Amid much industry fanfare, Iridium promised true global roaming for mobile users, but the service was beset by technical problems and critics said its pricing was too expensive. Motorola, Iridium's chief backer, finally pulled the plug on the service after failing to find an adequate buyer for the company.

McCaw himself had offered to rescue Iridium by combining it with ICO Global Communications and Teledesic but later decided against the move.