Edward F Staiano, co-chairman and chief executive officer of Iridium, said Motorola has submitted a bid for the so-called gateway, and the Australians are weighing the offer. Australian officials have already tested the Iridium service, Staiano said, and are happy with its quality.

In addition, the North Atlantic Treaty Organisation has talked about buying its own link to the network of 66 low-orbit communications satellites, Staiano said, but discussion is so far preliminary. NATO is testing six Iridium phones.

An Australian purchase would be the second time Motorola has sold a government its own gateway into Iridium, a wireless service that allows users to make phone calls or receive pages from any point on the planet. Last year the US government purchased an exclusive high-capacity connection to Iridium for about $14.5 million.While Motorola makes and sells the equipment, Washington DC-based Iridium operates the service.

The service is attractive to governments in part because, even with phone rates of more than $3 a minute and handsets costing $3,000 apiece, Iridium is a cheaper alternative to a traditional government system, where every element is custom-made. In addition, Iridium's satellites perform well at the earth's polar regions, where most communications systems fail.

The US gateway is big enough to handle 120,000 users. Staiano said Australia is interested in a smaller system, but he didn't specify the size.

Iridium, which began commercial service on November 1, 1998 had 3,000 users at the end of the year, and expects to land 500,000 to 600,000 customers by the end of 1999 through an aggressive global marketing campaign. Staiano said that by summer Iridium will be offering smaller phones (the Iridium handset is about 20 centimeters long). "Think Micro TAC," Staiano said of the new size, referring to Motorola'spocket-size phone.

For now, the Iridium phone performs reasonably well in remote locations, away from large buildings. However, executives may find it hard to access voice mail, because the digital system sometimes processes data insufficiently. Motorola hopes to resolve this problem soon.

By arrangement with The Asian Wall Street Journal