Remember the spectacular crash and burn of Iridium in the 1990s? It was followed by a host of other satellite firms who could not make an economic business out of offering folks global coverage with expensive, clunky satellite phones. Iridium has since emerged from the rubble with a significantly tighter business plan, targeting global corporations and so has GlobalStar. But now folks like MSV and GlobalStar are emerging again with the help of the FCC, which is allowing them to offer a cellular component--a component these companies say will allow them to make a go of the satellite business, because they can now penetrate buildings and offer more attractive pricing plans with more stylish handsets.
Everyone is crying foul about the fact that the mobile satellite service (MSS) industry is getting its licenses for free to compete with mobile operators who have paid billions for their licenses. But you have to wonder if this cellular component will make them successful anyway, which will make this spectrum give-away a bigger travesty. MSS operators are years away from offering such a service and will once again have to invest a significant amount of money to launch satellites and build a terrestrial network. With technology moving as fast as it is, MSS operators risk launching expensive outdated technology that will have trouble competing with 3G services. Remember, we already know the market for a world phone is quite limited, and MSS operators have said they expect most traffic to travel through the yet-to-be-built cellular networks. Even if satellite players can compete effectively on the ground with existing operators, they still have those massive, expensive satellites orbiting the earth that they need to make money from. Will we see the Iridium era all over again? - Lynnette