WASHINGTON (Reuters) -- Iridium LLC, a bankrupt $5 billion satellite telephone service, entered the history books on Saturday as one of the costliest corporate fiascoes of all time.

The Washington-based company, with headquarters in Bermuda, said it was cutting off telephone service to its 55,000 customers as of 11.59 p.m. this past Friday (0459 GMT on Saturday), a prelude to court-ordered liquidation.

Iridium's last act will be to "de-orbit'' -- and ultimately burn up -- its constellation of 66 satellites now 485 miles (780 km) high, which was the first to make staying connected possible from any spot on Earth. The network has been reported to have cost $5 billion to $7 billion.

By beaming instructions to on-board devices, engineers eventually will tip the craft, one by one, on a path that will send them down in flames.

The target will be the ocean -- a spectacle that may be visible from Earth.

Iridium on Friday gave up its hunt for a buyer to rescue it from bankruptcy proceedings. "No bid was received which was a qualified bid,'' William Perlstein, an attorney representing the firm, told the US bankruptcy court.

Iridium flames out Judge Arthur Gonzalez cleared Iridium to spend $8.3 million to start winding up its business while selling remaining Earth-bound assets, including ground stations.

Iridium had been operating under court protection from its creditors since last August, less than a year after its network became operational on November 1, 1998.

The flop reflected a string of badly botched business calculations. For one thing, the company's clunky telephones initially were priced at $3,000 apiece, with calls costing as much as $7 a minute. Not only were the phones as big as bricks, but they did not work indoors.

Iridium was doomed by the rapid spread of ground-based wireless networks. Such networks now let business travellers, a prime market for the satellite phones, stay connected from most major destinations.

Bringing the satellites back must be coordinated with several US government agencies.

Iridium flames out million to start winding up its business while selling remaining Earth-bound assets, including ground stations.

Iridium had been operating under court protection from its creditors since last August, less than a year after its network became operational on November 1, 1998.

The flop reflected a string of badly botched business calculations. For one thing, the company's clunky telephones initially were priced at $3,000 apiece, with calls costing as much as $7 a minute. Not only were the phones as big as bricks, but they did not work indoors.

Iridium was doomed by the rapid spread of ground-based wireless networks. Such networks now let business travellers, a prime market for the satellite phones, stay connected from most major destinations.

Bringing the satellites back must be coordinated with several US government agencies.

Last call: Mark Fithian, a PR specialist at Iridium, displays a pocket-size pager and world phone at a 1995 telecoms fair. Things didn't go as well as expected and now Iridium has told a bankruptcy court it plans to start shutting down the midnight this past Friday. leaving 55,000 customers without service.