Second chance for satellite phones
The war in Iraq refocused attention on the global mobile phones, but the costs are still out of reach for the average consumer.
By DAVE GUSSOW, Times Staff Writer
© St. Petersburg Times
published April 28, 2003
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A Qualcomm GSP-1600 satellite phone, which sells for about $500, is available with Globalstar service.
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Cell phone users frustrated by poor signals and dropped calls had to be envious. In images from the barren Iraqi desert, through sandstorms and a war, they watched as satellite phones provided a link to events halfway around the world.
Before cell users look to the sky for relief, they should know a few things about the satellite phones that were such a crucial tool of the trade for reporters embedded with U.S. troops.
"For people who need it, it's a godsend," said Jeff Kagan, a telecom analyst in Atlanta. "For the masses, it's not competitive."
Predicted to be one of the next big things during the tech boom of the 1990s, the satellite phone industry crashed to Earth even before the dot-coms melted. Some companies burned through billions of startup cash in expectations that they would sign up millions of subscribers and investors would double their money.
It didn't happen. The phones were expensive, costing more than $2,000, and implausibly big. In the early '90s, some models weighed about 8 pounds and were the size of a briefcase.
Air time cost $4 a minute or more, and phoning was mostly an outdoor activity, requiring direct access to the orbiting satellites.
Before the industry could really get off the ground, cell phones started sweeping the consumer market with far more affordable phones and service.
Now, the war in Iraq has provided invaluable PR and what amounts to a relaunch of the retooled satellite phone industry.
Phones are smaller and not quite as costly, ranging from $500 to $2,000, and air time can be as low as 17 cents a minute, though $1 to $1.50 seems to be the norm.
Still, those are not numbers many consumers would find appealing.
So companies such as Iridium Satellite Solutions (www.iridium.com) Globalstar USA (www.globalstar.com) and Intelsat (www.intelsat.com) are focusing their efforts on markets such as the military, homeland security and businesses ranging from oil and gas exploration to construction to maritime to the media.
Among the selling points: Their networks are not as vulnerable to terrorist attacks, they cover most of Earth's surface and they can be used to track or monitor everything from moving vehicles to nuclear power plants.
"It is technology that will be relegated to a niche market for at least the foreseeable future," said Kagan, the telecom analyst. "It is not a mass market product as it was first envisioned."
Iridium Satellite in Arlington, Va., is an example of the industry's new direction. It filed for bankruptcy in 1999 after going through $5-billion and launching 66 satellites. It came out of bankruptcy two years ago with new ownership.
It is aiming at the narrow markets, including a $36-million-a-year contract with the Department of Defense. It is approaching 20,000 subscribers and hopes to break even by the third quarter, according to Warren Brown, the company's director of communications.
"While the war effort has gotten us a lot of exposure, it hasn't brought us additional business," Brown said. "The growth into vertical markets is really gaining and helping us establish footholds in other markets."
Among local executives, TECO Energy chief executive Robert Fagan uses a satellite phone to stay in touch with managers. There's a bit of a learning curve for satellite phones that underscores its specialty market status.
When the phone is turned on, it signals the closest satellite. After the number is dialed, the signal goes from satellite to satellite until it gets close to its destination. A call being made to a land-line phone will be directed to a ground station and transmitted over wires. If it's a call to another satellite phone, it will be beamed from a satellite to the handset.
Users need to have a "line of sight" to the satellite. That means they either need to be outdoors or use some kind of antenna that points to the sky, similar to dishes used for satellite TV. If they want Internet access, they have to settle for speeds that are a fraction of what the new higher-speed cell networks provide.
"While it's significantly available everywhere on the globe, the quality is not the same as a simple cell phone," Kagan said. "What you gain in remote access, you give up in voice quality."
Wes Allison, a St. Petersburg Times reporter who was embedded with the 101st Airborne Division in Iraq, used an Iridium phone to file his stories. For data, it worked great, Allison says, but not as well for voice.
"It was very difficult to carry on a conversation because it would lose the satellite, and before it would pick up another one it would cut off," Allison said. "A five-minute conversation would take three-four-five phone calls."
Another reporter embedded with Allison used a newer phone, and Allison says it worked well.
- Times news researcher Kitty Bennett contributed to this report, which includes information from Times wires. Dave Gussow can be reached at gussow@sptimes.com or (727) 445-4228.
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