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Thursday, 14 October, 1999, 16:25 GMT
New satellite phone launched
satellite launch
Launching many satellites is an expensive way to build a telephone system
By the BBC's Richard Quest from Telecom 99 in Geneva

The phone is bigger than usual; it takes a bit longer to connect than normal; and on a couple of my calls my mother's voice sounded like she was underwater.

The telecoms revolution
In fact the call was far from the sea - going instead thousands of miles direct from the handset up to a satellite and into her home a thousand miles away.

Welcome to the world of satellite phones.

Worrying history

The history of satellite telephone companies is very unhappy. Iridium which is already up and running has filed for bankruptcy protection - as has ICO Global Communications, which hasn't even started service yet.

But launching a new service is what Globalstar did at the trade show Telecom 99 in Geneva.

And the company predicted it would make a profit by 2001, as it unveiled an $18 million dollar offensive to win customers.

The concept of satellite phones is delightful. It's a phone that uses dozens of satellites orbiting the world and lets you make phone calls from just about anywhere. As long as the thick antennae can see the sky, you can talk.

But the reality has been anything but pleasant. The increase of cellular coverage and better reception meant many prospective customers were no longer interested.

Today's tri-digital phones can be used in just about every country at moderate cost to the business user.

Dual use phone

That is why Globalstar has provided a phone which can be used either as a cellular OR satellite phone. The company believes it will avoid the mistakes of Iridium, which launched its satellites, started its service but couldn't sell its $3000 phones.

Instead of marketing the phones it will provide the service.

The President of Globalstar Anthony Navarra, speaking to the BBC, said they had taken a different approach to Iridium:
"What we are doing right is going into partnership with Vodafone, France Telecom and a consortium of companies who will provide the marketing and service. We are providing the airtime."

But that begs the question "Who wants this phone anyway?" Navarra believes that "there are more than 30 million users who want cellular, satellite and fixed wire global services" and most of them are in remote parts of the world where putting in phone lines is not an option.

They are not the high-spending, world-travelling corporate executive who is already serviced by existing mobile phones.

"So hospitals, farms and small villages will use these phones," he says, perhaps subsidised by governments in developing nations.

Putting in a sat payphone instead of a traditional land line, will "help people have a better way of life" Mr. Navarra added.

Lower costs

The costs of the calls have come down dramatically. While Iridium originally wanted to charge over $5 per minute, Globalstar believes it will cost around $2 - a bit more if you're calling across several oceans.

The technology and achievement of the satellite phone companies is beyond doubt. They are, surely, to be admired.

But for investors and shareholders - more worried about profits than Nobel Prizes for technology - the question is: will they ever make money?

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