04.22.13
Posted in Globalstar, Handheld, Inmarsat, Iridium, KVH, Maritime, Operators, Services, VSAT at 9:22 am by timfarrar
Its interesting to note that Inmarsat has been competing much more aggressively against key competitors in the last few months. First, I’m told that Inmarsat offered a bounty to Telemar to capture Anglo Eastern, a key Iridium Open Port customer with 350 ships, from Globe Wireless, in the fourth quarter of 2012.
Then Inmarsat announced in March that Nordic Tankers, one of KVH’s earliest headline customers, was migrating to XpressLink “for enhanced reliability”. Apparently the pricing on that deal is well below the standard list price for XpressLink, but Inmarsat was very keen to demonstrate its ability to take customers away from KVH.
Now (perhaps showing a little pique at losing the recent tender for the AT&T Genus replacement contract) Inmarsat is going after Globalstar, with new North American ISatPhone Pro regional voice plans which will start on May 1, and match Globalstar’s recently announced Orbit and Galaxy plans (though without Globalstar’s “double time minutes” promotional offer). Inmarsat is once again offering a huge bounty to service providers for these new signups, equivalent to multiple months of service revenue.
All of these developments suggest that Inmarsat is determined to seek topline growth in its L-band business and is no longer reluctant (as in the past) to explicitly target its competitors with selective pricing, even though this runs counter to Inmarsat’s recent tendency to increase list prices. Of course, it is less clear whether the new deals will be profitable for Inmarsat, given the incentives needed to achieve these sales.
But with Inmarsat’s investors focused intently on whether the wholesale L-band Inmarsat Global business has returned to growth, and apparently willing to overlook the recent significant contraction in margins within Inmarsat’s Solutions business unit (blamed on a transfer of margin from retail to wholesale operations), that might not matter for now. However, if Inmarsat wants to make more acquisitions (and it is hard to see in the long term who else might end up operating LightSquared’s satellites), then regulators might wonder whether industry consolidation could give Inmarsat even more market power.
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12.03.12
Posted in Globalstar, Handheld, Inmarsat, Iridium, LDR, Operators, Services at 3:26 pm by timfarrar
Apologies for the lack of posts over the last couple of weeks – I’ve been buried in writing my latest MSS industry report, which is bigger and better than ever, and includes not only all the latest MSS industry developments such as an analysis of Inmarsat’s investor day, but 30 pages on everything you want to know about the current spectrum issues involving DISH, LightSquared, etc. I’ll be writing blog posts about that plus some of the latest inflight connectivity developments over the next few days, but I’ll start with a little noticed fact that emerged while I was analyzing MSS subscriber growth: surprisingly enough, the various MSS operators use very different definitions for what they count as a subscriber.
Now you might think that a subscriber is simply someone who is paying the operator for service (perhaps indirectly via a distributor) and if the customer is paying for x terminals, then the MSS operator will report that they have x subscribers. That is basically what Iridium do, now that there is a charge each month even for suspended terminals. However, until recently Inmarsat didn’t have a monthly access charge for most terminals, and only got paid for airtime. As a result, Inmarsat has always defined its subscriber count as terminals that have accessed the network in the last 12 months. Now that Inmarsat is charging monthly fees for most services, this leads to anomalies such as in its 2012Q2 results, where Inmarsat noted that:
“At the time of our consolidated financial results for the three months ended 31 March 2012, we announced having reached over 55,000 IsatPhone Pro subscribers. However, in our reported active terminals for land mobile, we included a lower number of approximately 49,800 terminals, the difference being the elimination of subscribers who had not used their IsatPhone Pro terminal in the preceding twelve months…”
Even more significantly the number of Satellite Low Date Rate (M2M) terminals reported by Inmarsat has declined quite noticeably over the last year, but as far as Inmarsat’s distributors like SkyWave are concerned, the number of subscribers is actually going up. However, once you realize that a key application for ISatM2M is stolen vehicle recovery, its pretty obvious that only a small proportion of terminals (i.e. those cars that are actually stolen) will need to access the Inmarsat network each year.
That’s a positive for Inmarsat, because their market share in the SLDR/M2M sector is actually quite a bit higher than many assume. However, Globalstar’s counting methodology goes the other way: SPOT customers are included in the published subscriber count even if their terminal is “suspended” for non-payment, because those terminals still have access to the network and Globalstar is attempting to collect payment for the service (although of course no revenue is actually being recognized for those subscribers unless and until collection occurs). The number of suspended SPOT subscribers has increased consistently since this statistic was first reported in early 2010, and by 2012Q3 amounted to 29% of SPOT subscribers. I’ve generally been pretty optimistic about the long term potential of the personal tracking market, but worringly, in the third quarter of this year the number of paying (i.e. non-suspended) SPOT subscribers actually fell from the previous quarter for the first time ever.
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04.30.12
Posted in Broadband, Globalstar, Handheld, Inmarsat, Iridium, LDR, Maritime, Operators, Services, Thuraya at 8:49 am by timfarrar
I noted back in November that the MSS industry was seeing a dramatic deceleration in revenue growth, but 2012 is already bringing even more challenges across the sector. As I predicted last month, Inmarsat’s price rises are causing a substantial backlash in the shipping industry, with the latest Digital Ship magazine including a devastating letter from AMMITEC (the Association for IT Managers in the Greek Maritime Industry), asserting that:
The handling of the pricing restructuring shows a blatant disregard for the long-term loyalty and trust that, up until a couple of years ago, the majority of the shipping world has had in Inmarsat and its maritime offerings.
Inmarsat’s (not terribly reassuring) response indicates that:
Inmarsat is listening to our customers. We recognise that some of these price changes will be difficult for smaller vessels, and so we will be introducing a small boat package to which they can transition.
However, to the best of my knowledge, this “Small Vessel Pricing Plan”, which Inmarsat told its distribution partners a couple of weeks ago was “in the final stages of development”, has not been announced before the pricing changes come into force tomorrow, and I’ve even heard suggestions that Inmarsat doesn’t actually intend to implement this plan unless it really does suffer from a significant number of customer defections.
Of course, Inmarsat is not alone in experiencing some self-inflicted wounds at the moment. Last Friday brought news that Iridium is implementing a “complete recall” of its new Iridium Extreme handset, while on March 30, Thuraya told its distributors that it had been unable to reach a manufacturing agreement with Comtech for its high speed MarineNet Pro maritime terminal (intended to compete with Inmarsat’s FleetBB) and so the terminal would not be in the market until “the end of the year”. As announced on its Q4 results call, Globalstar ran out of SPOT and simplex devices for a period of time in the first quarter after changing its manufacturer, and will shortly learn the results of its arbitration with Thales Alenia over its satellite contract.
Let’s just hope that all of this mess doesn’t harm the reputation of MSS providers for providing reliable service when its really needed, and in particular doesn’t make it even more difficult for the MSS sector to boost revenue growth in this challenging competitive environment.
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03.03.12
Posted in Broadband, Globalstar, Handheld, Inmarsat, Iridium, Maritime, Operators, Services at 8:23 am by timfarrar
Ease your trouble
We’ll pay them double
Not to look at you for a while
And you rely on
What you get high on
And you last just as long as it serves you
Explode or implode
Explode or implode
We will take care of it
This rather dark song seems to sum up perfectly Inmarsat’s current dilemma: will the recent price rises enable Inmarsat’s revenue growth rate to “explode” or will the souring relationship with customers and distributors ultimately cause their business to “implode”? As an article in Cruising World points out, the basic price of Inmarsat’s low end FleetBB plan (the Intellian version of which costs $55 per month) will “more than triple” in May, and “it’s surely looking like the company doesn’t feel much obligation to the boaters who purchased expensive but yacht-size FB hardware once able to get online most anywhere at reasonable costs if carefully used”.
I understand that the amount of bundled data included will double from 5 Mbytes/month to 10 Mbytes/month (which may not be terribly relevant to low end users), but the plan will not longer include any voice and SMS – that will be charged on top, increasing the costs further. Cruising World attributes the price increases to Inmarsat’s loss of LightSquared revenues, which is partially true, though I’m told that internally Inmarsat has set a target of double digit revenue growth within its maritime business, and with the core shipping business very depressed, the only way to do that is to force dramatic price increases upon existing Inmarsat customers.
Almost 60% of all FleetBB users are on this basic plan, and so nearly 15,000 maritime customers will be helping to “ease [Inmarsat's] troubles” by “pay[ing] them double”. More importantly, many of these customers bought their FleetBB terminals in the last two years, and now will most likely feel that they have been the victims of a bait and switch by Inmarsat.
The price changes in Inmarsat’s handheld business are equally dramatic, with roughly 90% of customers using either the basic plan or low end prepaid cards, which are also expected to more than double in price at the retail level. Thus Inmarsat will also be faced with something over 30,000 handheld customers who have bought their phones in the last 18 months and will similarly feel that they have been victims of a bait and switch.
‘Cause you’re deserted
What’s good, you hurt it
And it kills you it keeps you alive
So give it up
In a world of puppets
It’s a shame what they do to us all
Inmarsat will presumably counter that neither group of customers accounts for a large share of their revenues (I would estimate the basic FleetBB plan accounts for perhaps 10% of FleetBB revenues, while handheld is still generating only ~$1M of service revenues per quarter), but it can’t be good for long term business if there are something like 45,000 end users who’ve been hurt by Inmarsat and will be expressing their negative perceptions (“What’s good, you hurt it…It’s a shame what they do to us all”) of the company pretty openly.
Distributors are also likely to be deluged with complaints by these end users, and many service providers are already actively focusing on alternatives to Inmarsat, as we saw with the recent KVH-Iridium partnership. Distributors are thus understandable furious about Inmarsat’s moves, with the (printable) comments I’ve heard ranging from “harsh and irrational” to “just unprofessional” and simply have no idea what Inmarsat will do next.
Though distributors might not be able to “desert” Inmarsat right now, ironically the low end customers that Inmarsat is alienating in the maritime segment are precisely those for whom Iridium’s OpenPort represents a competitive offering. Indeed, in terms of the opportunity that Inmarsat has just created, Iridium apparently feel like its February 2007 (when Globalstar announced that their satellites were failing) all over again.
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02.23.12
Posted in Handheld, Inmarsat, Maritime, Operators, Services at 10:44 am by timfarrar
2011 was a very tough year for Inmarsat, when the company struggled to grow its MSS revenues at all in the face of a shipping downturn and military pullback from Afghanistan. Now 2012 has started on an even worse note, with LightSquared defaulting on its $56.25M Feb 18 payment to Inmarsat.
In the face of this pressure, Inmarsat have adopted a somewhat surprising response to increase their revenues. Inmarsat indicated in the latter part of 2011 that maritime E&E prices would be increased from January 1, 2012 in an attempt to shore up legacy maritime revenues. This move was at least somewhat logical, as it did not affect the early adopters who would be most likely to churn to other services.
However, in early 2012 Inmarsat also announced they were withdrawing the wholesale voice price cuts made in early 2011 when they trumpeted a suggested retail price of $0.55 per minute for FleetBB and FleetPhone voice calls. I’m told that apparently these wholesale price cuts had simply been absorbed by Inmarsat’s partners, and had not led to widespread retail price declines (because Inmarsat’s maritime crew calling rates were still uncompetitive with Iridium), but they did have a major negative impact on Inmarsat’s maritime voice revenues in 2011.
Even more remarkably, this week Inmarsat have just told partners that they will be increasing the price of ISatPhone Pro handsets by about 20% and withdrawing the two year prepaid card expiry for low value cards that I criticized back in 2010. It therefore appears that Inmarsat has finally recognized (as Iridium very bravely concluded when they continued with a premium handset strategy) that there is very little churn in the MSS handheld market and this cannot be increased simply through lowering prices.
UPDATE (2/27): I’m told that Inmarsat is also increasing the monthly subscription prices for postpaid ISatPhone Pro service very substantially, and we are likely to see retail prices rise by around $15 per month (in other words what is currently a ~$200 per year service for low end customers would potentially double in price). I’ve not yet managed to confirm when this price rise will take effect. This is likely to cause quite a lot of upheaval as distributors figure out how to reposition the ISatPhone Pro once it is no longer pigeonholed as the “cheap and cheerful” satphone option.
Taken individually all of these changes therefore seem to have a rational basis, but it has to be very worrying when distributors have to go and explain to their customers that Inmarsat’s prices are being increased in numerous different areas, when historically customers’ biggest complaint about Inmarsat has always been that they get a great service but are being gouged on price. This also comes in the context of a wider telecoms sector where it is almost universally accepted that prices will go down and services will improve each year. While these changes may be sufficient to allow Inmarsat to achieve (at best very modest) positive growth in MSS revenues during 2012, they could also set up more difficult comparisons in 2013, especially if some customers opt for competitors’ services instead.
More broadly, Inmarsat need their customers to respond positively to the company, especially now that direct sales are being emphasized and when Global Xpress is poised to enter a much more crowded maritime VSAT market in a couple of years time. As a result, it will be interesting to see how views on Inmarsat develop across the MSS industry as these price changes filter through to end customers, and whether customers’ satcom choices are affected in the future.
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11.29.11
Posted in Aeronautical, Broadband, Globalstar, Handheld, Inmarsat, Iridium, LDR, Maritime, Operators, Orbcomm, Services, TerreStar, VSAT at 12:20 pm by timfarrar
As I remarked in an interview for the Satellite 2012 downlink newsletter yesterday, 2011 has seen a dramatic deceleration in MSS revenue growth, with wholesale service revenues now expected to grow by less than 3% in 2011, compared to the 7%-8% growth seen in each of 2008, 2009 and 2010. Yesterday we also released our latest industry report which gives ten year forecasts for MSS industry growth. In the L-band market (including Inmarsat L-band, LightSquared, Thuraya, Iridium, Globalstar and Orbcomm) we project cumulative revenue growth from 2010 to 2020 of only 4% p.a. and even when Global Xpress is added to Inmarsat’s revenues in the latter part of the decade, the overall cumulative growth rate is only increased to around 6% p.a.
This represents a striking contrast with widely quoted forecasts from Euroconsult and NSR, that the MSS market (excluding GX) will grow at 7% p.a. over the decade (Euroconsult) or 10% p.a. from 2010-15 (NSR). These optimistic forecasts seem to have achieved wide currency with analysts and bankers, who have argued (for example at the Satcon conference in October) that the MSS industry is more attractive than the FSS industry because of its much faster growth profile. One example that stands out is a JP Morgan analyst report on Inmarsat, published last Thursday, which gives an upbeat assessment of Inmarsat’s prospects and projects a target price of 800p per share (roughly double the current level). Not only does JPM expect LightSquared’s spectrum lease payments to be continued indefinitely after they file for bankruptcy (which is ludicrously unrealistic once you understand that LightSquared’s political backing has evaporated and even the FCC has basically given up on them, but may reflect the fact that JPM co-led (with UBS) the sale of LightSquared’s first lien debt earlier this year), but they expect Inmarsat’s core L-band business to resume growth at 2.5% p.a. from 2012 and Global Xpress to achieve Inmarsat’s target of $500M in annual revenues after 5 years.
Where do we differ with Euroconsult and NSR? It appears the primary source of the discrepancy is in our expectations for the maritime and aeronautical L-band markets. According to the JPM report, NSR is projecting 11% p.a. and 13% p.a. growth respectively for the maritime and aeronautical segments between 2010 and 2015. We are told that Euroconsult also takes a relatively optimistic view of the outlook for the maritime and aeronautical L-band markets. However, our expectations are that wholesale maritime and aeronautical L-band service revenues will actually decline between 2010 and 2020, as customers move to Global Xpress and other VSAT solutions. As a result, future L-band growth will have to come from land-based services, particularly low speed data and (to a much lesser extent) handheld satellite phones. That’s relatively good news for Iridium and Globalstar (as well as Orbcomm, if they can continue to gain momentum), but its still unclear whether ~8% p.a. growth in land MSS revenues will be sufficient for all of these companies to thrive in the face of what will inevitably be an ever-increasing focus by Inmarsat on this part of the MSS market.
If you are interested in our latest report, which also includes a detailed analysis of Inmarsat’s maritime market outlook and forecasts for in-flight passenger communications services, as well as discussion of the current prospects for terrestrial use of MSS spectrum, please contact us for more details about our MSS information service.
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09.07.11
Posted in Globalstar, Handheld, Inmarsat, Iridium, Operators, Services at 8:40 am by timfarrar
So Iridium has announced its “vision for the future of personal mobile satellite communications”, Iridium Force, including a range of new products and services. These new products and services are not exactly what was rumored last week (no commercial Netted Iridium service or standalone Bluetooth device). Instead they include the new Iridium Extreme (9575) phone, which includes integrated tracking capability and an SOS button, a new smaller 9523 voice and data module (which could potentially form the core of a standalone voice-capable device) and the AxcessPoint WiFi hotspot which provides data capability through a 9575/Extreme or 9555 phone.
It seems the aim of the AxcessPoint hotspot will be to increase usage of existing phones, via a low incremental cost (~$200) accessory, which is likely to provide a better financial return for existing service providers than a more disruptive low cost standalone device. Indeed Iridium expects to achieve a premium price for the new Extreme phone and does not see a need to lower the price of the 9555 for now (given its strong sales so far this year despite competition from the ISatPhone Pro).
If the two phones are sold (at retail) for say ~$1200 and ~$1000 then it wouldn’t surprise me if up to 80% of Iridium’s handset sales for the rest of this year are of the new Extreme phone (assuming adequate stocks are available). That would certainly be positive for Iridium’s 2011 equipment revenues, which to date have not declined compared to 2010 as the company originally expected. However, Iridium intends to keep the 9555 in production, providing it with optionality on pricing next year, once Globalstar comes back into the handheld market.
What will be really interesting is how Globalstar pitches itself, given that Inmarsat has not achieved much revenue success with the ISatPhone Pro at the low end of the market. It seems Globalstar will need to challenge Iridium and focus on the medium and high end of the handheld market in order to achieve reasonable ARPU levels. In that case, how important will a low price handset be to Globalstar (given this strategy hasn’t yet enabled the ISatPhone Pro to penetrate the high end of the market)? Will unlimited usage packages be a better strategy to pursue, or will Globalstar’s other attributes (consumer distribution channels, better data speeds, low latency and good voice quality) be sufficient to achieve a different result to Inmarsat? Whatever course Globalstar takes, Iridium’s success in the handheld market over the last 12 months means I’m not convinced that lower handset prices are as important to future revenue growth as some people previously expected.
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09.02.11
Posted in Financials, Handheld, Iridium, LightSquared, Operators, Regulatory, Services, Spectrum, TerreStar at 9:20 am by timfarrar
Next week on September 7, Iridium is announcing “a new force in personal communications that aims to address the growing expectation of connectivity everywhere, all the time” which is “more than the launch of a single product”. There have been a couple of rumors about what this might be, firstly a commercial version of the Netted Iridium PTT service that has been such a success with the DoD, in conjunction with the new 9575 phone (which has a convenience key that could support such functionality) or secondly a Bluetooth-enabled device (similar to inReach or SPOT Connect) that is voice and data capable and can connect to standard cellular phones (a concept that has been put forward on multiple occasions by various MSS operators, including ICO Global back in 2001 and is already possible on Inmarsat BGAN terminals). Of course there may be some third unknown possibility, but of these two options it appears that the first is a more differentiated concept and may be nearer to realization at this point in time.
This week Inside GNSS reported some interesting insights into the LightSquared/ GPS interference debate, including a meeting in Washington DC last Friday August 26, “brokered by NTIA” which “suggested that a new test period — of 90 days or more may be needed”. The article also mentioned “Guidance from the White House” which mandates that officials “cannot attack LightSquared” because “President Obama apparently sees LightSquared’s plan as a centerpiece of a wireless broadband initiative that he hopes to make part of his re-election campaign”. More information may emerge at the rescheduled September 8 hearing of the House Committee on Science, Space, and Technology, which could be especially controversial as “NTIA reportedly is refusing to release information about the effect of GPS denial of service submitted by federal agencies” (similar to the devastating FAA assessment) to the Committee chairman.
Finally, a little more clarity emerged on how the claims of TerreStar’s various creditors will be treated, after the bankruptcy judge ruled on August 19 that the first lien debtholders have a valid lien on the proceeds of TerreStar Networks’s spectrum licenses. As a result, it now appears that in the TSN bankruptcy, there may be as little as $30M-$40M of cash left for the unsecured creditors ($1111M left of distributable value after paying the DIP and PMCA loans vs secured claims of $1077M as of August 31), who have total claims of $460M (including $179M for the 6.5% Exchangeable Notes and $104M for Sprint), although of course some of these claims (including an intercompany loan of $57M from TerreStar Corporation) are being challenged and TSN has asserted quite sizeable claims in the TSC bankruptcy (which could increase the total recovery, albeit in New TSC Notes, by tens of millions of dollars). However, this certainly means that Harbinger is taking yet another hit on its TSN investments, when it was buying Exchangeable Notes at as much as 82 cents on the dollar last November and the return to unsecured creditors is estimated to be only 10 to 15 cents on the dollar.
In the TSC bankruptcy, the Plan of Reorganization that has been filed contemplates that unsecured creditors (including potentially Elektrobit and TSN) with total claims estimated at $136M will receive “New TSC Notes” with “face amount equivalent to estimated Allowed Claims” secured by the estimated $177M value of the 1.4GHz spectrum. The Preferred Stock holders ($90M of Series A held by Highland and $318.5M of Series B, the majority of which is held by Soros and Harbinger) will fund an exit facility of $6.5M and receive all of the new equity in TSC, while the 1.4GHz spectrum lease (with Harbinger/ LightSquared) will remain in place providing $2M per month of revenue for TSC and more than covering the estimated $12M annual interest expense on the New TSC Notes.
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08.23.11
Posted in Handheld, Inmarsat, Iridium, Operators, Services at 8:41 am by timfarrar
One of the most puzzling aspects of Inmarsat’s Q2 results was the revelation that while it has now activated over 30K ISatPhone Pro handsets (as of early August), and sold at least 15K handsets to distributors during the second quarter, land voice revenue in the quarter was only $3.3M, down 17.5% on the corresponding period in 2010. While the decline in overall revenue appears to be largely due to reduced BGAN voice usage in Afghanistan, service revenues from the ISatPhone Pro still appear to be pretty minimal, presumably less than $1M in the quarter, and Inmarsat admitted that the revenue “is still lagging where we would like it to be”.
I’m told that the reason for this discrepancy is that Inmarsat has sold nearly 10,000 phones in China over the last year, which come pre-activated with a 10 minute prepaid card, valid for 2 years. That explains why Inmarsat is now claiming to have achieved a one third share of new activations, although it still appears to be trailing Iridium in overall handset sales (Iridium added 17K net new commercial voice subscribers in the second quarter).
Of course, the booked service revenue from these ISatPhone Pro sales in China is well under $1 per month, which clearly has a dramatic impact on Inmarsat’s overall handheld ARPU. As a result, if the Chinese market continues to be a major driver of sales for the ISatPhone Pro, it will make it even harder for Inmarsat to come close to gaining 10% of the handheld market in revenue terms by the end of 2012. Indeed the challenge that Inmarsat faces in “break[ing] into the heavy-spending larger customers where there is a long-established provider in place” is amply demonstrated by the fact that apparently journalists don’t even know what an ISatPhone Pro handset looks like.
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06.19.11
Posted in Financials, Handheld, LightSquared, Operators, Regulatory, Services, Spectrum at 7:14 pm by timfarrar
What would you know? I go camping for a weekend, and suddenly we have a $20 billion network sharing “deal” between Sprint and LightSquared “to share network expansion costs and equipment, and to provide high-speed wireless service to the phone company” described in a leaked letter to “Harbinger Capital Partners hedge fund investors”. This seems like a very peculiar way to reveal such a ground-breaking deal, especially as Sprint notably declined to comment on whether or not a deal had been signed, and there is little clarity about whether this is a new deal or simply the same “accord” that was reached some time ago.
UPDATE (6/20): LightSquared’s CEO today “declined comment on whether a deal had been finalized”, after telling Bloomberg in an interview on June 10 that “if we have something to announce we will be back here”.
Regardless, the obvious question is what conditions remain to be satisfied, before Sprint actually moves forward with the buildout. As I’ve noted before, it is critical that Sprint gains sufficient security to cover its upfront costs, either from rights to LightSquared’s spectrum assets or LightSquared raising additional cash through an IPO. However, a near term IPO looks like a stretch, and it is unclear whether the second lien spectrum rights granted this week are sufficient to satisfy Sprint. Also LightSquared obviously needs to resolve the GPS interference issues, so it can actually use its spectrum. If the leaking of this deal (presumably by Harbinger) serves to plunge Sprint into the firestorm of the GPS interference debate, then it will be very interesting to see whether Sprint decides to actively support LightSquared or takes a more neutral position with the FCC and Congress.
However, all that is somewhat of an aside to the real purpose of this post. My camping trip was only 40 minutes away from my home in Silicon Valley, but in an area with absolutely no cellphone coverage. Wouldn’t it have been great to have one of LightSquared’s new dual mode satellite phones (if and when they come to market) so I could have had a connection to the real world that would have allowed me to hear about the breaking news? Unfortunately not, because when I looked up at the sky, all I could see was trees, and as with any MSS network, you need a line of sight to the satellite to be able to make or receive a call.
TerreStar’s Genus satellite phone has proven to be a complete disaster, despite the expectation that there would be vast global demand for these phones. As a result, I wonder if some of the commentators in the LightSquared proceeding really have any idea what they would be getting from the LightSquared network in rural areas (after all, a terrestrial network covering 92% of the population will leave at least 25M people relying on satellite coverage).
For example, this letter asks us to “think of Native American communities who do not even have basic cellphone service now but would with this network” and this letter notes how the “new super-fast broadband wireless network that is backed up by satellite communications…would provide our staff seamless connectivity even in extremely remote locations”. However, that’s hardly surprising when we are told how you’ll have voice connectivity and can get your e-mails “no matter where you are, if you step out of your car, in the Yellowstone National Park” (where there’s also an awful lot of trees and mountains) or “in the middle of Grand Canyon” (pretty difficult when there’s a 5000ft cliff to your south). Haven’t we heard that one somewhere before?
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