Tim Furniss/LONDON
Making a mobile telephone call to and from anywhere in the world is about to become reality. Motorola's Iridium satellite system should be declared operational this year. Market studies indicate, however, that satellite services may not make as great an impact as first thought.
The sixth Boeing Delta 2 launch for Motorola, on 20 December, 1997, resulted in five more satellites being sent into orbit, bringing the total launched so far (also those by Russia and China) to 46 of the planned operational fleet of 66, although two of the craft have since developed faults.
Motorola's battle with four original major competitors has been eased because two have dropped out (Flight International, 4-10 October, 1995). The proposed Mobile Communications Ellipso system never really got started, although the firm still has hopes for it - but TRW, with its controversial Odyssey system, for which patent claims were issued to stop competitor ICO, has also bowed out, instead taking a 7% stake in ICO.
ICO, the only non-US operator and an affiliate of the international Inmarsat organisation, has been boosted by a US Federal Communications Commission ruling in December 1997 which makes it easier for foreign satellite operators to gain access to the US market.
Meanwhile, the Loral-led Globalstar system begins launches in February, aiming to offer services later this year, while ICO, which also starts launches this year, will not offer services until 2000 (see box). Others are preparing to enter the ring, but may have left it too late.
An important aspect in perceiving the satellite segment's place in the market is that it will be transparent to the user, who will buy a handset capable of using one of the satellite systems and which, if the call requires a satellite to be used, will switch automatically to that mode. The main advantage is that not only do many areas of the world have no cellular services, but existing cellular systems are not necessarily compatible with the telephone in use. A satellite will be, however.
While this terrestrial state of affairs is likely to be improved, a major market area is that of international travellers, who want to use one handset anywhere, and "national roamers", who frequently move outside a cellular zone within their own country.
The provision of services from the satellites depends on a series of licensing-user agreements between satellite operators and companies in every country wishing to provide the system. The services are provided through gateways on the ground where billing information and user-location data will be stored. Major investors in the systems are therefore based in countries providing services. In some cases, investors are still being sought to complete financing. ICO has raised working capital of $1.7 billion so far.
Getting operational on time will be critical to success because, by early next century, terrestrial cellular services will be more widespread and, unless customers have signed up for a satellite system, they are likely to be linked to terrestrial services by their handsets, says a new survey by the London-based Ovum company.
If the satellite systems are up and running by 2002, there could be 8 million subscribers generating a joint annual revenue of $8.5 billion, compared with 320 million users of terrestrial cellular services generating $72 billion. If the satellite systems are not operational, they will be overtaken by the enlargement in the capacity of terrestrial systems.
Indeed, the European Union says that mobile satellite services will not make much impact. International business travellers will soon be able to use their mobile telephones more widely with terrestrial links .
Source: Flight International
