Mobile satellite is making a comeback

Remember that series of financial disasters in the late 1990s for mobile satellite services (MSS) companies such as Iridium, Globalstar and ICO? Ten years later, and the industry appears to be headed for a resurrection, enabled by relaxed regulations, business plans, new satellites capable of offering broadband applications and a remedy to those clunky handsets that played a large role in the industry's downfall.

Several MSS 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 as the FCC now allows operators to utilize terrestrial partners.

And the crux of their plans is an announcement that flew somewhat under the radar in September. Qualcomm made a deal with ICO and Mobile Satellite Ventures (MSV) to put satellite and cellular phone technology into baseband chips embedded in multi-mode phones. This will both allow a wider consumer market to access satellite connectivity and enable handset makers to develop EVDO, WCDMA and LTE phones that are satellite-capable.

"That means that satellite-enabled chipsets are going to be available at no incremental cost," said Chris Gates, vice president of strategy with MSV. "The power of this can't be overstated. It means that satellite services can move cost effectively into the mass market with no impact on device form factor."

ICO has deployed a GEO satellite designed to deliver a satellite-hybrid terrestrial network using mobile TV technology DVB-SH. The company has begun market trials in Las Vegas and Raleigh-Durham with Clearwire to focus on increasing the value and cost effectiveness of delivering advanced interactive mobile video services.

"The amount of capacity that these networks lose by offering video over terrestrial networks is immense," said ICO CEO Tim Bryan. "Even if you have LTE or WiMAX it doesn't matter. There is a lot of capacity that is lost. It would be much more efficient to offer mobile video on a nationwide basis by offloading it to satellite and use the other capacity for data and other services."

MSS could also provide an avenue for terrestrial wireless broadband providers to expand their coverage. Globalstar recently won approval from the FCC to incorporate WiMAX in the ancillary terrestrial component (ATC) level with the help of terrestrial partner Open Range Communication. The two will offer WiMAX to more than 500 rural communities--with the help of a $267 million loan from the Department of Agriculture's Rural Development Utilities Program. Globalstar said it will be looking for other partners too.

Mobile Satellite Ventures (MSV), which already offers satellite telephony service to niche markets, plans to launch two new high-powered satellites capable of high-speed data with service available in 2010, but hasn't announced any terrestrial partners yet. According to Chris Gates, vice president of strategy with MSV, the satellite provider offers a significant advantage for terrestrial operators wanting to extend coverage and offload data traffic because it has access to a large swathe of spectrum via an agreement with Inmarsat, which gives it the ability to access up to 46 megahertz of spectrum, 40 megahertz for ATC services and 6 megahertz for MSS only services.

"That's an extraordinary amount of spectrum, about the size of the 700 MHz auction," Gates said. "We think there will be huge demand for additional spectrum as data becomes more and more important, and we're available in the near term."

In addition, MSV is targeting a host of markets: government, enterprise, telematics and mass consumer.

But it seems like the biggest hurdle to getting the message across that satellite operators make good partners for terrestrial network operators is the stigma associated with the failed business plans of the past. Bryan said that stigma is the reason ICO has been busy building its satellite capabilities and demonstrating what its services can do.

2009 should be an interesting year for the satellite industry. We could see some new and interesting partnerships--perhaps even one that creates a new nationwide 4G wireless network in the U.S. --Lynnette