Orbcomm, the satellite data messaging service owned by Canada's Teleglobe and Orbital Sciences, has filed for Chapter 11 bankruptcy protection. It is the third satellite operator after Iridium and ICO Global Communications to do so in the past few months after experiencing financial difficulties.

The filing allows Orbcomm's constellation of low Earth orbit satellites to continue to operate and protects the company from its creditors while it works on a plan to restructure and seeks additional financial support.

The company provides low bandwidth data communications used to track and maintain contact with a variety of fixed and mobile assets ranging from oil wells and pipelines to trucks and vessels.

Orbcomm first revealed its financial problems in June, laying off 112 employees, a quarter of its workforce. Two months later it made a further 100 people redundant. At the time it reported the operation was suffering from slow subscriber growth.

Meanwhile, the Globalstar worldwide mobile satellite communications systems company has sufficient liquidity to operate beyond March next year following the purchase of $105 million in company stock by Bear Stearns.

The Loral Space Communications-backed Globalstar had drawn down a $250 million bank loan in July to enable it to continue operating until March, having attracted only 13,000 customers.

The problems of Orbcomm, and to a lesser extent Globalstar, come against a background of serious setbacks for the satellite based mobile communications industry.

Earlier this year, Iridium went bust, with debts of over $4 billion, and was followed by ICO Global Communications, which was rescued from its financial problems by a consortium led by telecommunications entrepreneur Craig McCaw.

Source: Flight International