Computers Today, December 1-15, 1998, Telecom

From the sky their hubs will rule global telephony. On the earth, their phones will offer conveniences of one handset, one contact number and one bill. But only for those with firm grips and deep pockets.

Alexander Graham Bell's baby has not only grown and developed wings. It is ready to fly. In 1876, the great man rang in a communication revolution which lasted more than 100 years. On November 1 this year, Bell's great grandson Gilbert Grosvenor flicked open another era when he received the first official call on the Iridium Global Mobile Personal Communication System (GMPCS). What will the birth of satellite mobile phones bring to bear on the world of messaging?

First, hand-held satphones will no longer be the exclusive toy of an information age James Bond flitting across the screen with gizmos and girls. It will come down to the user level, empowering people to receive and make calls anywhere from Mount Everest to the Dead Sea. Second, the customer will have total global access across multiple cellular and land-based systems with one phone, one number, and single billing system. Add to that the other remarkable virtues of the the satphone; it can send voice, data, fax and page messages.

Who will Bite?

Business travellers in the domestic as well as international sectors.

Business and Government organisations.

Basic service operators seeking low-cost service expansion to remote areas.

Cellular operators seeking low-cost service expansion to low-density areas.

Commercial vehicles, maritime and aeronautical vessels.

Teams involved in disaster control.

A subscriber identity module (SIM) card on the Iridium phone will route all calls through a dedicated satellite network. "Weighing less than half a kg, the smallest satellite phone in the world combines unprecedented mobility with coverage," says Krishna Kumar Singh, manager, marketing services, Iridium India Telecom. Moving between local networks will be as easy as inserting a different cellular cassette--each one compatible with a major cellular standard. At present, cassettes cover Global System for Mobile Communication (GSM) 900, Code Division Multiple Access (CDMA), Advanced Mobile Phone System (AMPS)/N-AMPS 800 standards. Additional standards are being planned for the future.

Pairing an Iridium phone with the compact Iridium pager creates a flexible, cost effective communications package that picks up messages worldwide. It does not matter whether or not you are within the terrestrial paging spread.

Indian users will have to wait. The country is out of the Iridium footprint for the time being, courtesy bureaucratic knots that entangle the telecom sector. Iridium India Telecom, the service provider for the SAARC region, was able to get a provisional licence from the Central Government just 48 hours before the worldwide launch. By the time the subsequent spectrum allocation and interconnections were granted, the global operations were already set in motion. India is now expected to join the Iridium constellation early next year.

Iridium India Telecom is lamenting the initial damage and has begun totting up the costs. Its managing director Jaydev H. Raja says the delay will cause Iridium's Indian gateway to lose about $1 million. All the calls received and sent to the south Pacific region, which includes Australia and New Zealand, will now be routed through the Thailand gateway in Bangkok. Even VSNL, the operations and maintenance partner of Iridium India Telecom, is going to lose approximately $1 million. But much will depend on the actual traffic through Iridium's south Pacific operations.

Hand to Mout

What do satphones offer?

Wireless telephone access to virtually any God forsaken location in the world.
An easy-to-use handset that accesses any cellular and land-based standard.
One phone number for callers.
Quick connectivity.
One simple bill for your entire account, in one currency from a single source.
Worldwide alpha and numeric paging.
Global customer care, including 24-hour customer assistance in 13 languages.
A near maintenance-free operation.

Around the globe, Iridium has paved the first footprints for others to follow. Globalstar is clinging to its launch date in the third quarter of 1999. ICO is due to start in the latter part of 2000.

Like Iridium, Globalstar and ICO Global too are building digital telecom systems based on low-earth orbiting (LEO) satellites and gateways. All the three have adopted the same business model-- joining forces with terrestrial cellular service providers in different countries. This strategy also saves the satphone companies the burden of direct recruiting, servicing and billing customers.

But tariffs will be a sticky factor, at least in price-inelastic markets like India. For calls within the same country, Iridium has fixed its tariffs at $2.00 a minute. For international calls the range is between $3.00 to $5.00 a minute. Pagers on the network are expected to be priced under $100 per month for global service. Globalstar's domestic call charges are likely to fall in the range of $1 to $2 a minute, while its phones will cost between $880 and $1,400. ICO says its in-country call rates are likely to average at $3 a minute. Its handsets will be priced at $1,000 while Iridium's will be upwards of $1,200.

Indian start-ups are getting ready to join the battle with the global players. The Foreign Investment Promotion Board (FIPB) has cleared two proposals for GMPCS by Reliance Communications and ACeS India Pvt. Ltd, promoted by New Delhi-based Shyam Telecom Ltd. Reliance has envisaged a project cost of $1 billion. According to the deal, Reliance will hold 51 percent of the equity, with the remaining to be pitched in by foreign institutional investors and the project's equipment suppliers. Reliance is said to be talking to Intelsat and Inmarsat for provision of services.

Agrania, an Indian joint venture between Essel Group and Lockheed Martin, is also in the GMPCS fray. It is focussing on the Indian subcontinent, South East Asia, Middle East and Africa. Ispat Group is also set to enter the satellite-based telephony and broadcast services. Hughes Network Systems could be its likely foreign partner.

Pricing strategies in the satphone arena are still a few years away. But customers should be happy. At the turn of the millennium, satellite phones could be configuring a big leap forward in the planet's communication history. An achievement, Bell would have been proud of.