Everywhere you look it seems wireless companies are declaring bankruptcy. Iridium, NextWave and Metro PCS all are trying to beat their way through the complex jungle of Chapter 11 bankruptcy reorganization to make a go of it in tomorrow’s telecom field. Narrow-band PCS player Conxus Communications Inc. ended its operations with Chapter 7 bankruptcy last week, and there is a move under way to force DCR (a subsidiary of Pocket) into Chapter 7, which effectively would end the company’s chances of offering PCS service.
Call me an optimist, but I am not counting out the Chapter 11 cases yet. Sometimes, being forced to change your business strategy is the best thing that can happen to your company.
MSS provider Iridium gains the most attention in the consumer press. Yes, the company has done a lot wrong. But each time I hear the plethora of Iridium criticisms, my mind wanders to Nextel.
At one point, Nextel was written off by a lot of folks, too. (So was Qualcomm, for that matter.) Granted, the biggest differences between Iridium and these other companies may be that Nextel and Qualcomm never were in such tough financial shape that they had to declare bankruptcy. But both companies spent a significant amount of time with their stock trading in the dog house. And today, both companies are wireless success stories.
In 1993, RCR-in its first award of an industry person of the year-chose Nextel’s Morgan O’Brien for almost single-handedly creating a new industry.
Not too much later, the stock took a dive, and Nextel fell out of favor with Wall Street. Stories were everywhere, criticizing everything from Motorola’s MIRS technology used for the network to Nextel’s marketing strategy.
Sound familiar?
Amidst the criticism, Motorola and Nextel worked side by side to improve the product and change Nextel’s game plan. It began marketing its technology to business user groups, no longer touting itself as the third cellular carrier in each market.
Today, Nextel is a formidable force in the wireless industry.
MobileMedia successfully reorganized under Chapter 11 laws, culminating in the sale of the company to Arch Communications.
Iridium, NextWave and Metro PCS face difficult times ahead, but this industry is full of one surprise after another.
