Satellite Is Sexy Again

Some of the biggest names in tech have tried—and failed—to win at satellite communications. Remember Teledesic, a venture begun by wireless pioneer Craig McCaw and Microsoft co-founder Bill Gates aimed at constructing a constellation of hundreds of satellites that transmit high-speed Internet services? Or how about Iridium, or ICO Global Communications, or Globalstar? Those are among myriad efforts to use satellites to beam phone calls and broadband access that were ultimately scrapped or ended up in bankruptcy court, having lost billions of dollars. "Over the history of the industry, there have been a number of ventures that have been restructured and scratched," says Rich Power, an analyst at consulting firm Pike & Fischer. Yet somehow, satellites are sexy again. Many of the companies that ended up in Chapter 11 have reemerged and are once again drawing investors' interest. In the past half-year, private equity firms including Harbinger Capital Partners and Silver Lake have poured billions of dollars into satellite companies. In February, BC Partners, Silver Lake, Intelsat management, and other investors acquired satellite broadband provider Intelsat for $17 billion. In March, the Gores Group and other private equity investors snapped up satellite services and networking provider Gilat Satellite Networks for $475 million.
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