Iridium files for bankruptcy protection

Iridium has been forced to apply for bankruptcy protection after defaulting on an $800m (£500m) loan - following the expiration of a credit facility earlier this month.

The satellite communications operator promised that the move would not interrupt its global service. Motorola, the company's largest investor, said it was confident that Iridium would come up with an approved restructuring plan within 30 days.

While the operator had expected to add 50,000 customers a month this year, by the end of the first quarter it had managed only 10,000, which constituted a violation of its bankers' credit requirements.

Iridium was touted as the world's first global satellite phone and paging company when it was finally launched on 1 November last year, after being dogged by technical problems.

However, its service came under fire from customers for being too expensive as some calls cost $7 a minute, while some satellite handsets are priced at several thousand dollars.