Handsets Reach New Heights
By Erik Milstone
Its well-known that CDMA technology will play a pivotal role in Globalstars global mobile satellite service. However, all the satellite systems soon to begin commercial services are planning to offer handsets with cdmaOne capability.
If all goes as planned, three multi-billion dollar satellite companies will offer service in the next two years to business executives, explorers and other globetrotters who trek to even the most remote places in the world. Although each company is using a different technology to link its satellites with ground stations and customers, each will also use cdmaOne.
Globalstar L.P. is using a proprietary version of CDMA technology to link its gateways, or ground stations, satellites and customers who will carry a special satellite phone. The company is betting CDMA's advanced technology will help it provide better service at a more reasonable price than its competitors.
Meanwhile, Globalstar, Iridium LLC and ICO Global Communications Services Inc. will all take advantage of the growing popularity of cdmaOne by offering a phone that can make calls on its own satellite network or through one of the growing number of CDMA wireless carriers on the third rock from the sun.
"The fact that you have Globalstar and Iridium both planning on offering handsets that will allow worldwide roaming for CDMA systems is very appealing," says Perry LaForge, executive director of the CDMA Development Group in Costa Mesa, Calif. "[As for] cdmaOne itself, its strong point is that it's in a number of very large markets that are growing rapidly."
By the end of 1997, there were an estimated six million cdmaOne subscribers worldwide, according to the Yankee Group in Boston. That gave CDMA a three per cent share of the worldwide wireless phone business. By 2002, however, CDMA will account for 17.3 per cent of the market, surpassing the number of analog subscribers but still trailing GSM subscribers, who will account for about 47 per cent of the market worldwide, the Yankee Group estimates. Among the markets that will drive CDMA's growth are Japan, China and Latin America.
Along with expanding potential markets, the fact that all three satellite companies will use CDMA terrestrial wireless networks gives a boost to the technology and a further response to its critics. Partnering with global satellite networks could also help end the ongoing squabble within the wireless industry about which technology is best.
"Iridium and Globalstar certainly are trying to present themselves as a multi-standard system as a way of tying it all together and I think that's smart for them," says Ira Brodsky, president of Chesterfield, Mo.-based Datacomm Research Co., a consulting firm.
From a technological standpoint, Globalstar believes
its CDMA-based system will be superior to ICO's or Iridium's, which plan
to use GSM or TDMA technology in their satellite links. Among other things,
CDMA allows Globalstar to use "rake" receivers in customer handsets
and satellites. Each finger on the rake can pick up a different signal,
increasing the chances that a connection will be made and maintained.
CDMA allows Globalstar to more efficiently use the capacity of its satellite
network and will give a better signal quality. CDMA also means Globalstar's
network will use less power, cost less and have a greater capacity than
its competitors, the company believes.
"It was seen as a way to investigate some of the technical issues involving Globalstar and reduce some of the risk," McVeigh says. "The main one for Globalstar was GSM security. We did full GSM authentication, no problem."
Globalstar, based in San Jose, Calif., has launched eight satellites so far this year and plans to have 44 low-Earth-orbiting, or LEO, satellites in space by year's end as part of its $2.6 billion network.
The company also plans to ship 37 of its 38 Qualcomm-built gateways this year. "Our hope is by the middle of the first quarter they will have 10 to 12 of those in the network doing the system test," says Globalstar president Doug Dwyre. Service should begin by mid-1999.
To make sure its footprint looks like that of a Sasquatch, Globalstar is continuing to sign new companies that will provide service around the world. In early May, the company announced that Al-Murjan, a Saudi Arabian company, will distribute Globalstar services in the Middle East. At the time, that meant Globalstar had deals in 114 countries, accounting for about 90 per cent of the company's planned coverage area.
Iridium and ICO also are moving ahead. ICO plans to launch its first satellites later this year from Cape Canaveral, Fla. Eventually, the company will have 10 satellites in a medium-Earth-orbit, or MEO, constellation as part of its $4.5 billion network.
In May, ICO signed up its 60th investor, the Arab Satellite Communications Organization, which invested $3 million in the company. ICO expects to begin commercial service in 2000.
Iridium, another low-Earth-orbit system backed largely by Motorola Inc. of Illinois, had launched 67 of its satellites and launched its remaining five from Vandenberg Air Force Base in California on May 17.
The launch completes Iridiums batch of 72 of satellites 66 for its main system and six spares in its $4.4 billion network. The company has deals with 180 partners which provide service to 51 million subscribers. Iridium plans to begin service Sept. 23.
To reach the largest number of users, satellite companies are signing deals with wireless carriers that use different technologies on various frequencies. That means Globalstar and the other systems must have several different phones.
Globalstar, ICO and Iridium have hired big-name manufacturers to design and build handsets that can bounce calls off satellites or connect them through one or more terrestrial wireless carriers, including those operating CDMA networks at 800 MHz, GSM at 900 MHz, AMPS, digital AMPS and PDC networks in Japan.
"From the very beginning we planned multimode phones," says Globalstar president Dwyre. "We take our name Globalstar seriously." In other words, you cant reach a worldwide audience with just one phone.
In April, Globalstar said it had signed three deals worth a total of $353 million. The manufacturers will build mobile and fixed satellite phones for the Globalstar network. Qualcomms phones will work in the satellite, CDMA and AMPS modes. Ericsson OMC, Ltd., a subsidiary of Ericsson Telecommunications, and Telital of Trieste, Italy will build dual-mode phones that work as satellite/GSM 900 MHz phones.
Globalstar expects its phones will cost less than Iridiums but more than ICOs. "We at Globalstar think they will be about $750 (U.S.)," a company spokesman says. "But that will change from market to market. Some subscribers will subsidize the cost of the phone."
AirTouch Communications Inc. of San Francisco, a Globalstar investor which operates an 800 MHz CDMA network in the United States and has interests in international wireless companies, is telling customers calls will cost more than $1 a minute for mobile phone users. Fixed satellite phones, such as those located in villages without any wireline phone service, will cost less than $1 a minute.
Motorola Inc., Iridiums main backer, will supply phones that work on different wireless networks by inserting a "cassette," technically called an Iridium Interoperability Unit, or IIU.
Larry Mishler, vice president and director of Motorolas satellite subscriber products division in Libertyville, Ill., says the companys first phones will combine satellite and either GSM 900 MHz or CDMA 800 MHz service. The CDMA phones are dual-mode and will also work on AMPS or NAMPs networks.
The Kyocera Corp. of Japan is manufacturing phones for Iridium too. Kyoceras phones will work as a satellite phone and on GSM, CDMA, AMPS or PDC networks. When the phones are needed for satellite roaming, they slip into a larger cradle that contains its own battery and antenna.
Iridium has said its phones will sell for $2,000 to $3,000 (U.S). Phone calls will cost up to $3 (U.S.) a minute, the company says. Although thats more than other systems, Iridium says its satellite callers wont have to pay hefty long-distance charges because calls are bounced satellite to satellite, bypassing most of the existing long-distance wireline networks which will tack on additional fees.
Motorola also is making a pager for Iridium that will retail for about $500 (U.S.). London-based ICO, meanwhile, has signed deals with consumer products companies which have jumped into the phone market following the recent explosion of wireless networks worldwide.
"At the moment we are concentrating on ICO for GSM, for CDMA, for AMPS, for digital AMPS and PDC for Japan," says Patrick Chomet, director of handset development at ICO.
ICO has announced deals with NEC, Samsung and Mitsubishi to develop dual-mode phones. Prototypes should be available early next year when the company begins testing its satellite system, Chomet says. The phones should retail for the equivalent of about $600 (U.S.).
Satellite/TDMA phones, which could be used by carriers such as AT&T Wireless Services in the United States and a growing number of carriers in Latin America, are planned, as are CDMA and GSM phones that operate at 1.9 GHz, a frequency used by companies in the United States and in growing markets such as Africa and China. Sprint PCS, for example, has more than 1.1 million U.S. customers on its 1.9 GHz CDMA network, but has not announced any deals with the satellite companies.
Although customers might find themselves in unfamiliar terrain when using a satellite phone, their phones features should be familiar to digital wireless phone users. ICO plans to have voicemail, call forwarding and a locator feature, similar to, but less exact than, a full global positioning system tracker. Qualcomms portable Globalstar phones will deliver short messages, voicemail and a location detector that indicates a users latitude and longitude. Kyoceras phones for Iridium will have call forwarding, conference calling, alarms, four separate memory banks for phone numbers and a map, among other things. More features will be available as satellite companies add them to their networks.
The satellite phones are larger than todays incredible shrinking wireless handsets. Motorolas Iridium phone, for example, will be 453 grams, or about 16 ounces, with the radio cassette. It will be 410 cubic centimeters, or 25 cubic inches, and have a talk time of two to four hours. Thats about average. Batteries will be lithium ion and be rechargeable almost anywhere in the world.
As with any new venture, satellite telephone companies face obstacles. On a broad scale, they need licenses to operate in many countries, says Joseph Pelton, research professor at the Institute of Applied Space Research at George Washington University in Washington, D.C. "A number of countries have duties and licenses that say you must pay $1,000 to $10,000 a year to have a satellite transceiver," Pelton says. That could be a problem, he says, although it isnt clear whether countries will charge those fees for a satellite phone.
ICO still does not have a license to operate in the United States. The company has been talking with the U.S. Federal Communications Commission to resolve issues involving its ownership structure, Inmarsat and international regulators. The FCC also is concerned about the cost of relocating companies that currently use the 2 GHz band ICO wants for its satellite links.
As of early May, five of Iridiums satellites were not working, according to a Motorola executive. Even so, the system should be operational as scheduled in September because the network was designed to function even if several satellites have technical difficulties.
Globalstar announced several significant financial deals in April. Among them was Loral Space & Communications Ltd.s offer to up its interest in Globalstar to 42 per cent by buying out some existing investors. Loral, Globalstars biggest financial backer, also proposed establishing a $210 million fund to purchase Globalstar gateways and handsets. And international financier George Soros agreed to become an investor in the worldwide satellite system.
Lorals offer to increase its investment should give Hyundai Corp. and Dacom Corp. a way to liquidate at least a portion of their investment in Globalstar. Continuing concerns about South Koreas ongoing economic problems, as well as those of eastern Asia in general, led the companies to say they wanted to sell their Globalstar stake.
Meanwhile, Globalstar is working to make sure its service in India, South Korea and Chile the areas for which Hyundai and Dacom were responsible will move forward. A deal which gave Hyundai the right to manufacture phones for Globalstar is dead.
While companies acknowledge ongoing difficulties, none are bailing out of the great race to circle the globe with satellite phone networks. "It continues to be challenging," says Globalstar President Dwyre. "But we do expect to be in service in the second quarter of 1999."