one to put on the radar screen

Quadrant Iridium Ltd
Letter to Shareholders

23 February 2004


Dear Shareholder,

During the last 6 months Quadrant Iridium Ltd (“Quadrant” or the “Company”) has continued build momentum towards delivering against its strategy of achieving returns from strategic investments in undervalued telecommunications assets and emerging high return ventures.

In December 2003, the Company successfully completed a capital raising (fully subscribed) of $1.38m. These funds have been utilized to reduce creditors and to underpin the working capital of the Company as it continues to build momentum into 2004.

Through its three wholly owned subsidiaries (Bareena Holdings Pty Ltd, ETSdirect Pty Ltd and Approach Telecom Australia Pty Ltd) the Company recognizes that 2003 was one of consolidation and building, but is looking forward to 2004 shaping up as one of growth and stabilization.

This short letter represents an update of our activities in the three key areas of the business.


Bareena Holdings Pty Ltd (“Bareena”)

Bareena holds a major investment in Iridium Holdings LLC (“Iridium”) a global satellite telecommunications company. Being ideally suited to rural and remote applications, Iridium has continued to concentrate on, and has had success in, tapping markets such as maritime, construction and mining, aviation, forestry and oil and gas.

Iridium continues to provide service to the US Department of Defense under a multi-year contract and is being used successfully by others such as the British Ministry of Defense in some of the world’s trouble spots.

Technically, the constellation of 66 low earth orbiting satellites (as well as spares) continues to perform well and is operated by The Boeing Company in a long term management contract.

Coupled with a growing distribution base that now exceeds 35 service providers globally and tight cost controls, Iridium was able to achieve a significant milestone in its evolution by reaching cash flow break even from its operational revenues in the last quarter of 2003.

With the recent appointment of Carmen Lloyd as the new CEO/Chairman of Iridium, we look forward to further growth and strengthening in the market as well as continued product development in areas such as remote monitoring which are ideally suited to key markets such as homeland defense.


ETSdirect Pty Ltd (“ETSdirect”)

Enhanced Telephony Services take advantage of higher settlement rates on international telecommunications to route premium services.

ETSdirect had almost immediate success with a local offering that now has two customers and has contributed net returns to the Company of over $325,000 in the past nine months.
The Company formed a relationship with Q-Tel through a loan and investment agreement in April 2003, which was strengthened later in 2003 when the investment was rolled over indefinitely.

The Company had previously announced the successful trial of traffic in the US. Traffic is currently being tested or is in soft launch stage in Japan and Europe. These developments are a positive step toward viable long term revenue streams.

In addition, the company is focusing on emerging markets such as premium SMS for competitions or voting.


Approach Telecom Australia Pty Ltd (“Approach Telecom”)

While only formed in late 2003, Approach Telecom has undertaken significant development and recently completed its first month of operation in January. The soft launch saw the company release its services to a small number of customers to test the full end to end capabilities of its infrastructure and customer management systems. Unlike the ETSdirect opportunities that are often delivered on a wholesale basis, the Approach Telecom business owns the customer interaction.

Over 1,000 customers received long distance data services through the company generating over 10,000 minutes. The results were pleasing in that the variable costs and collection processes of the operation were able to be managed closely enabling it to breakeven in its first month.

Based on this result, the company announced that it had launched commercial operations in early February and through to the mid February, the business has connected 5,000 customers who have generated over 50,000 minutes. Approach Telecom and will ramp up traffic in a controlled fashion while maintaining strict cost controls to concentrate on profitable growth through the first half of 2004.


Throughout 2004, the Company looks forward to bringing you announcements about how our current efforts are being translated to viable and lucrative revenue streams that deliver shareholder value.

Yours faithfully


Michael Boyd, Chairman

Phone: 61 8 9489 6219
Fax: 61 8 9382 4656