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Boeing builds for Teledesic
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April 29, 1997: 11:04 a.m. ET
Company will lead effort to build $9 billion Teledesic satellite network
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NEW YORK (CNNfn) - Boeing Co. announced Tuesday that it had entered into an agreement to become the prime contractor to build a $9 billion network of communications satellites for Teledesic Corp.
Boeing will also invest up to $100 million to acquire 10 percent ownership of Teledesic, which is partially owned by Microsoft Corp. Chairman Bill Gates.
The aerospace company said it will lead an international group to design, build and launch the Teledesic Network. The proposed network would offer access to telecommunications services such as broadband Internet access and videoconferencing.
Teledesic is currently headed by telecommunications pioneer Craig McCaw who built McCaw Cellular, the world's largest cellular phone company, before selling it to AT&T Corp.
McCaw said his company chose Boeing because of its previous space-related work and its experience in managing large, complex global alliances.
"Boeing and all of the associated suppliers it brings to the table from around the world will ensure that Teledesic is a global endeavor," McCaw said.
The company said that its satellite constellation will orbit about 50 times closer to Earth than traditional satellites, eliminating some of the delay problems of other telecommunications measures. Users of the network will access it through antennas the size of direct broadcast satellite dishes.
The deal has been approved by the boards of directors of both companies.
Teledesic received approval last month from the Federal Communications Commission to build the two-way telecommunications network. The approval allows them to enter into commitments with international partners.
Shares of Boeing (BA), which were hurt by a slow earnings report Monday, gained 1-3/8 to 96-3/4 on the news.
--Randy Schultz
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Teledesic
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