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Teledesic, Motorola Go Separate Ways

Bellevue, Wash.-Teledesic LLCandMotorola Inc.have scotched an agreement that called for Motorola to serve as the prime contractor for Teledesic's ambitious broadband-satellite system. The announcement comes in the wake of Teledesic's plan to merge with ICO-Teledesic Global Ltd.

Under its initial $10 billion proposal, Teledesic planned to launch about 288 low-earth-orbit satellites and offer high-speed services using the Ka band by 2004. Teledesic said the "mutual decision" to part ways with Motorola will give it the flexibility to pursue other technical approaches for its orbital, high-speed network.

Bill Gates and Craig McCaw are Teledesic's two primary founding investors. Teledesic's other financial backers include Saudi Prince Alwaleed Bin Talal, Boeing Corp. and the Abu Dhabi Investment Co.

Despite the decision to end their technical agreement, Motorola will remain an investor in Teledesic, the companies said.