NewScientist. Low Earth obit
(via I* yahoo thread)
By Barry Fox
LAUNCHING A NEW global technology and creating
the standards to go with it is becoming evermore
difficult. Governments seldom agree or have the cash
to make such projects happen. But the military can--we
have the armed forces to thank for the Internet, the
Global Positioning System (GPS) and now perhaps a
satellite phone system.
Twelve years ago, a network of satellites orbiting the
Earth that would bounce cellphone calls from anywhere
to anywhere must have seemed a wonderful idea.
Then, cellphone services were hopelessly incompatible
and almost nobody had one. So it's perhaps not so
surprising that soon after Motorola floated the idea, a
consortium called Iridium LLC had $5 billion of
investors' money to its name and a gleaming new
factory in the Arizona desert. What's not so obvious is
why the venture should have been allowed to end in
tears only nine months after the system was finally
launched at the end of 1998--which is what happened
when the consortium declared itself bankrupt last
month after defaulting on loans of $1.55 billion.
What went wrong? Well, for a start, at some $3000
each, not enough people bought the product. And the
technology does not work well. Iridium will not say how
many phones it has sold, but there are thought to be
fewer than 10 000 paying customers.
To be fair, though, getting the system running was a
remarkable feat. Instead of small teams handcrafting a
few satellites at a time over the space of, say, a year,
Iridium mass-produced more than 70 at a rate of one
every five days. With only a limited supply of rockets
available, the launches had to be spread between
California, Kazakhstan and China.
We now have other systems that enable cellphones
issued in one country to work in another. Ironically,
Motorola, Iridium's planner and main investor, makes
the GSM digital technology that now enables users to
roam and phone in more than a hundred countries.
Does the world still need Iridium phones? The company
clearly thinks so. The handsets, it claims, are not
intended to be used in cities, but in "remote places
where ordinary cellphones will not work". The corporate
line is that Iridium will be rescued by new investment
and restructuring. Well, perhaps. Like the Channel
Tunnel, which no one will now fill in whatever its
debts, Iridium is up and running and no one will shoot
it down.
The US military has already bought handsets and if the
commercial rescue deals fail, the army has good reason
to buy the whole system. And that could be good
news. Ten years ago the Pentagon set up the GPS to
guide Cruise missiles to their targets. The US
government only allocated the money on condition that
the public could use GPS with consumer devices.
Iridium handsets loaned to relief workers after
Hurricane Mitch and to aid agencies in Kosovo proved a
boon. These are exactly the users who cannot afford to
pay for the service. But if the military were to take
over Iridium, there would still be plenty of capacity for
subsidised calls by aid agencies and rescue workers.
One day we may all owe Motorola and its partners a
big thank-you for their mistakes.
From New Scientist, 11 September 1999
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