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RIM carrier Motient files for bankruptcy

Today's breaking news
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Wireless network provider Motient filed for Chapter 11 bankruptcy Thursday.

Motient, the former Ardis paging network started by Motorola and IBM, is best known as one of two wireless data service providers for the Research in Motion (RIM) handheld devices.

The other wireless data network offered by RIM is Cingular Wireless' Mobitex network.

Motient announced that a majority of its senior note holders "agreed in principle to the terms of debt restructuring."

Under the restructuring, the note holders will accept an equity position in the company in exchange for the notes. If approved by the court, the restructuring plan will also allow Motient to eliminate $40 million in annual interest payments.

Motient CEO Walter Purnell said that the deal will allow Motient to continue uninterrupted service to 250,000 subscribers.

But one well-respected wireless industry analyst said that Motient will have a tough road ahead as similar services are offered by the major cellular carriers.

"Both 2.5G and 3G will leave the Motient network as well as Cingular's Mobitex [paging network] at risk," said Gerry Purdy, president of Mobile Insights in Mountain View, Calif.

Both paging networks are proprietary, and non-IP, said Purdy.

"They have only a niche capability. This is a paging network, not a robust network," Purdy added.

Others go even further and say that if RIM is not able to move in step with the direction of the market, its future is also in question.

"In order for RIM to survive, it must morph itself into a serious platform player in the high-speed 3G world. They have to become a software company, not a hardware company and if they don't they may not survive," said a source who asked not to be identified.

Motient believes it will emerge from Chapter 11 by next quarter, according to a statement issued by the company.

InfoWorldFor more enterprise computing news, visit Copyright © 2002 InfoWorld Media Group, Inc.



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