Motient, one of the two operators with networks supporting Research In Motion's popular BlackBerry device in the US, has been forced to file for Chapter 11 bankruptcy protection.
According to the company, the filing was part of a prearranged deal with its creditors and should mean no interruption for the more than 250,000 subscribers that use its network.
The announcement is the latest in a long line of blows to the US wireless industry, in particular those set up to support business data users.
Metricom, which operated a high-speed wireless data network in selected cities across the US, shut down its service in August after filing for bankruptcy protection a month earlier.
In December alone, wireless data services providers OmniSky Corp and Arch Wireless Holdings Inc filed for bankruptcy, while wireless services reseller YadaYada Inc went out of business.
Under the terms of its filing, Motient aims to convert $335m of debt into equity, eliminating more than $40m in annual interest payments. According to the company, this could help it reach breakeven before earnings before interest, taxes, depreciation and amortisation (EBITDA) this year.
"This restructuring allows Motient to proactively eliminate substantially all of its debt and to significantly improve our ability to achieve EBITDA breakeven later this year," Walter Purnell Jr, chief executive at Motient, said in a statement.
Motient's business is increasingly focused on providing wireless networking coverage for handhelds, such as the BlackBerry devices, but its network also serves major companies including UPS, with all the company's deliveries recorded using the Motient network.
The firm also recently looked to break into the market for two-way communications capabilities to Palm V series handhelds by releasing its own modem and services package.
The Motient network is what remains of the ARDIS network that was conceived and built out by Motorola and IBM as a wireless network for Big Blue's service fleet in the late 1980s.
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