Can WiMAX be a boon to the MSS industry?

Can WiMAX become a boon to the long-struggling mobile satellite services (MSS) industry?

Most of us know the crash-and-burn history of the MSS industry in the late 1990s. Iridium and others ran to bankruptcy courts, suffering from high operating costs. Many players are now banking their survival on incorporating an ancillary terrestrial component (ATC) that would solve a fundamental problem plaguing the MSS industry: operators' inability to penetrate buildings with satellite signals. That technical shortfall has had a tremendous constraint on demand and resulted in higher operating and equipment costs. But ATC was looking to be another me-too cellular service, that is until WiMAX came along with its high-speed data capabilities that brings more unique services such as mobile video.

This week Clearwire announced a joint agreement with satellite company ICO Global Communications to collaborate on a mobile video trial that will begin in early 2008 in Raleigh, N.C. (See story No. 4). The trial will focus on increasing the value and cost effectiveness of delivering advanced interactive mobile video services. Craig McCaw, who founded Clearwire, owns a 75-percent voting interest in ICO, which has a new business model revolving around delivering mobile video and interactive navigation services to consumers.

For Clearwire, such an arrangement allows the company to deliver interactive and broadcast TV over WiMAX and quickly extend coverage.

Earlier this year, Mobile Satellite Ventures (MSV) teamed with Nortel to deploy a trial integrated WiMAX and satellite broadband service. The trial, being conducted in the Reston, Va. area, will initially feature high-speed wireless voice, data and Web access, file sharing and VoIP connectivity using residential gateway devices and PC cards for users in fixed and portable modes of use. Subsequently, MSV expects to incorporate push-to-talk, video calling, picture-caller ID, presence capabilities, full MSS/ATC integration and support for a range of mobile devices.

For sure, ever since the Federal Communications Commission allowed for ATC, the traditional mobile operator industry has seen satellite operators as players that gained an unfair advantage. And they haven't been interested in any partnerships with MSS players. MSS companies, in turn, face heavy investments to build out terrestrial infrastructure unless they team up with partners.

WiMAX and 4G technology potentially can create some new and interesting partners. For instance, a report from TMF Associates concludes that a partnership between an MSS operator and a satellite TV operator could provide spectrum and funding for deployment of a new nationwide 4G wireless network in the U.S. by 2010.

I suspect we'll see many experiments in the MSS area going forward.--Lynnette