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Boeing Inks Teledesic Deal Company Wins Contract To Build Satellite Network

Wed., April 30, 1997

Boeing Co. on Tuesday agreed to invest $100 million and won the contract to be the prime contractor in Bill Gates’ and Craig McCaw’s plan to blanket the globe with communications satellites.

Boeing will own 10 percent of Teledesic Corp., which plans to spend $9 billion to put 840 satellites in low-Earth orbit by 2002 to allow wireless access to the Internet and other telecommunications services.

The system would be capable of high-speed data transmission, allowing Internet users, for example, to download pages 60 times faster than today’s fastest modems. The system also would allow global video tele-conferencing, paging, faxing and voice communications.

Gates, the chairman of Microsoft Corp., and McCaw, who sold McCaw Cellular Communications to AT&T; in 1994 for $11.5 billion, are the primary investors in Teledesic, a privately held company based in the Seattle suburb of Kirkland.

McCaw said the goal is to give the remotest Third-World village access to the same level of service as a big-city corporation using a fiber-optics network.

“The key strength of Teledesic is global distribution of signal at low cost,” he said.

While “urban areas and the developed world probably would give us a lot of the money, a lot of the benefits would flow to the rural,” McCaw said.

As prime contractor, Boeing will lead the effort to design, build and launch the satellite network.

McCaw said Teledesic selected Boeing in part because of the company’s experience in space endeavors and in managing large, complex projects. He also said he wants to be able to tap Boeing’s experience in conducting global business and working with world-wide networks of suppliers and subcontractors.

Boeing recently acquired Rockwell International Corp.’s aerospace and defense business, and has announced plans to merge with McDonnell Douglas.

Alan Mulally, president of Boeing Defense and Space Group, said he had no estimates yet on how many Boeing employees would work on the project, or where the work would be performed.

However, the satellites’ small size and their planned low orbits give Boeing a range of options for getting them into space, he said. Because of their size, the satellites probably could be launched in clusters on existing large boosters, he said.

Boeing is the prime contractor for the U.S. space station and has a long history in space. Its new Boeing North American division, acquired from Rockwell, is prime contractor on the Space Shuttle and has extensive experience in launch vehicles, satellites, missiles and rocket engines.

Tags: business

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