Is the MSS industry on its way to a comeback?


Is the mobile satellite service (MSS) on its way to a comeback? And will WiMAX or other mobile broadband technologies play a pivotal role in their business models?

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. Now, at least three companies are working to make MSS a consumer product in the next two years and most are looking to the mobile broadband industry as a significant part of their businesses. ICO Global Communications announced plans during the CTIA trade show earlier this month to deploy a GEO satellite today that will deliver a satellite-hybrid terrestrial network using mobile TV technology DVB-SH. After the satellite is launched, the company plans to begin market trials in Las Vegas and Raleigh-Durham in mid-2008 of what it calls ICO MIM, Mobile Interactive Media.

The trials will focus on three areas: entertainment using DVB-SH for mobile TV services, guidance services that will include real-time traffic data and social networking applications and assistance services, which will offer OnStar-like roadside services. Moreover, WiMAX operator Clearwire plans to join the trial, bringing wireless broadband to the mix. Last fall, Clearwire announced a joint agreement with ICO. Craig McCaw, who founded Clearwire, owns a 75 percent voting interest in ICO.

Mobile Satellite Ventures (MSV), which already offer satellite telephony service to niche markets, is planning on launching two new high-power satellites capable of high-speed data and featuring smaller, sleeker and cheaper devices--one of the shortfalls of the old satellite telephony model. The difference this time around will be a system capable of superior link margin, full redundancy and capacity no terrestrial operator can match, said Wade Alt, vice president of corporate development with MSV. And of course ubiquity will be a key differentiator when the operator plans to launch service in 2010.

"We've done market studies and both consumer segments and the enterprise customers want this feature and are willing to pay for it," Alt said. "They like the ubiquity, and from consumer standpoint, it's brand new market out there."

There are a host of markets MSV is targeting: government, enterprise, telematics and mass consumer. One of the keys to being able to cast a wide net is hybrid technology. "It was important for MSV to prove we could integrate with existing chip sets. Satellite on its own was not enough. You can't have people walking around with clunky devices."

Another key factor was obtaining approval from the FCC to deploy an ancillary terrestrial component (ATC) that is designed to 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 in the past.

MSV doesn't have a terrestrial partner but Alt says the company is looking for a partner whether that's a WiMAX or LTE operator partner. It remains to be seen if these operators will see MSV as a competitor rather than a partner, but such a hook-up could could create a differentiator for a 4G operator by enabling it to offer ubiquitous services.

Finally, Satellite Terrestar Networks, formerly known as Motient, announced back in November plans to build what it calls a 4G all-IP integrated satellite/terrestrial network in North America. The company says it will offer a wholesale business model with priority access for first responders and allow other wireless carriers, third party developers and portal companies to use its 4G network. TerreStar plans to roll-out its network in late 2008 or early 2009.

For sure, these plans come with risk with unproven business models and commercially unproven technology. Couple that with the unknowns surrounding full MSS/ATC integration and nascent 4G technology, and you have the potential for a lot of trial and error or another crash and burn of the MSS industry. But if these companies pull their plans off, we could see quite an industry game-changer that will see mobile broadband as the center point.--Lynnette