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.

Filed Under: satellite phones