IRIDIUM LLC AND MOTOROLA MAY CEASE SERVICE TO ITS FSM IRIDIUM CUSTOMERS

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PALIKIR, Pohnpei, Federated States of Micronesia (March 23, 2000 – FSM Information Service)---FSM Telecom believes that Iridium LLC and Motorola will cease service to its Iridium customers effective this month, according to a March 16 letter sent to consumers by the telecom corporation’s general manager Takuro Akinaga.

In the event that this happens, FSM Telecom will refund in full the amount consumers paid to purchase Iridium handsets, upon return of the equipment.

However, FSM Telecom will not refund telephone card activation fees or call charges made using an Iridium handset, according to the letter.

The letter, sent to Iridium subscribers, is an update of the financial and operational position surrounding Iridium LLC.

Iridium LLC entered into voluntary financial restructuring to be supervised by U.S., also known as Chapter 11 bankruptcy, in August 1999.

Eagle River Investments Inc. had expressed interest in becoming a controlling strategic shareholder of a restructured Iridium company, but has since backed out.

FSM Telecom had been a service provider of Iridium services through Iridium South Pacific (PTY) Ltd. (ISP), which was provided by Iridium LLC.

Based on information received at FSM Telecom, it is believed that Iridium LLC will be unable to find an investor interested in acquiring a controlling interest in the company, said Akinaga according to the letter.

This development may impact the continued provision of Iridium services.

Continued operation of the Iridium system is a Motorola commercial decision that could be adversely affected in the event that Iridium LLC is unable to complete its financial restructuring. The Iridium system relies on both Motorola and Iridium LLC and is therefore beyond FSM Telecom’s control, said the letter.

Motorola presently is reviewing its position with regard to the withdrawal of the Eagle River investment offer, and has undertaken to keep the system operational, regardless of the outcome of the financial restructure process, said the letter.

Akinaga wrote that he receives regular updates concerning the progress of the financial restructure of Iridium LLC. However, to be prudent, FSM Telecom wants to make certain that consumers are aware of these events beyond FSM Telecom’s control.

Akinaga wrote that he apologizes for inconveniences caused and assured consumers that FSM Telecom is looking at alternate methods to provide mobile communications for the FSM community.

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