Two More Companies Lining Up Satellite Phone Networks
from the try-try-again dept
Two of the biggest tech flameouts of the late 1900s and early 2000s were satellite phone providers Iridium and Globalstar. Both had what sounded like a great idea: mobile phones that would work anywhere on earth. But the business model was a little more difficult: handsets were bulky, service was really expensive, and most of all, the costs of setting up and running a business based on satellites are, well, astronomical. Somewhat surprisingly, Iridium is still around, but that's really only because it went bankrupt and the current owners were able to pick up the company and its billions in infrastructure for $25 million. Globalstar is still kicking, too, and each company has about 300,000 subscribers, which isn't many considering the cost of the networks.But a couple of companies aren't letting a history of pain in the satellite business get in their way, and are looking to launch satellite phone networks of their own. They're focusing on covering just the US or North America, rather than the entire world, and one of the networks will use only a single satellite, so the costs will be lower than previous attempts. However, many of the drawbacks still remain: the phones, though smaller than previous satellite phones, still need line of sight to a satellite, meaning they won't work indoors or if environmental elements are in the way. Handsets are still expensive: one company says its first device will cost about $700, calling into question its CEO's claim that people will want to replace their BlackBerry with one. And they say service will be under $1 a minute, which is cheaper than Iridium, but still much more than typical cell service. They'll offer some minor advantages over existing satphones, which might tempt some users to switch -- but these companies are all fighting over market that's very small relative to their infrastructure costs. While most things in the tech world tend to come down in price over time, satellites remain really expensive, and that's a difficult obstacle for companies to overcome.
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Still, for all that, I'm not sure their overhead is as bad as you say; how many cellphone masts can one build and maintain for the same price as one satellite? Probably not enough to cover the whole of North America.
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There's More To It
There's more going on here than just another Iridium. The new satellite companies are taking advantage of many advances in technology.
The most important is that the handsets they propose are NOT just satellite, but are cellular-sat hybrids. Thus, whenever possible, the phones will use the much cheaper cellular networks, and work indoors as well as any cell phone. However, outside of cell coverage, they will continue to work on the satellite.
So, unlike sat phones of old, whose business model was killed by the expanding, cheaper-to-use cellular networks, these phones will take advantage of those cheaper networks whenever they can.
Meanwhile, Qualcomm has partnered with these new sat firms to develop new multi-mode baseband chipsets (the guts of a mobile phone) which can easily jump between sat and tower - at what they called "a comparable cost".
See: http://www.wirelessweek.com/article.aspx?id=163082
Two business models are obvious:
1) The new sat phone companies can sell service, and strike roaming/MVNO deals with cellular companies like Verizon or Sprint. The customer would not know or care that some calls are handled terrestrially. This is a lot like MetroPCS turned on its head: MetroPCS builds out in cities, and roams on Verizon outside the city. Sat services just would do the opposite...but charge more per minute for the advantage of FULL nationwide coverage.
2) The sat companies can offer roaming to any cellular company that wants to offer FULL nationwide coverage. Much like VZW is so proud of their new worldphone Blackberry, which can finally roam to Europe, they could release a phone or two that could boast complete coverage. VZW, in this case, would pay inbound roaming fees to the sat company.
Anyways, it's hard to compare these new efforts to Globalstar or Iridium. The goals are very different, the target markets are very different, the technology has changed a great deal, and the business models are very different. If these new businesses fail, it will be on their own merits!
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Re: There's More To It
Qualcomm... sounds familiar. Oh yeah, the company that partnered with Globalstar and half heartedly non-delivered on its promises?
These companies' business models are no different than that of Globalstar (but certainly different than Iridium). Globalstar's phones were "multi-mode" and capable of using cellular networks right from the start.
The problem for any new satellite phone company will remain the same as before: people that truly need satellite phone capability are few in numbers and a lot of the areas they would like to use those phones would require to have gateway (like Globalstar) and probably put them in jail if they use pure satellite connection (like Iridium). Don't even have to go far for an example, three a years ago an American "operative" was arrested in Russia just because he had Iridium phone.
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Re: Re: There's More To It
Sure, specific Globalstar phones could operate on cellular networks, too, but I would hardly call it roaming. This is how Globalstar referred to it:
"If you wish to add cellular service to your handset, please consult your local cellular providers to determine technical compatibility. Once cellular service has been successfully loaded on your Globalstar phone, you will have separate cellular and satellite phone numbers and bills."
So, basically, it was not roaming. It was "get your own, separate cellular account." That's hardly different from just carrying two phones, with two accounts. What number should people call you on? The one that doesn't work indoors, or the one that doesn't work out of town? The new solution has one bill, and one number that can reacy you in more places than ever.
Also, these earlier models were large, and were more expensive to build. The new solutions are smaller, cheaper, multi-mode chipsets.
Do you think Qualcomm has a reputation of bailing out on its customers? Globalstar could not get or guarantee sufficient volumes to motivate any vendor, that's not Qualcomm's fault.
I'm not saying I'm sure the new sat services will be winners, but I did say, and I stand by, that you can't compare them to Iridium or Globalstar.
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Re: Re: Re: There's More To It
Umm, yeah. Customer or partner, Qualcomm quite easily breaks their relationships and lucky is the company that does not end up on a wrong end of a lawsuit, as Qualcomm is one of the most litigious companies in the industry.
You also forgot to address the whole satellite "gateway" conundrum that restricted Iridium's use around the world and became the cornerstone of cost overruns at Globalstar.
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It's a Niche Market
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Globalstar
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re er
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Satellite Phone Costs
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