G* post from the GTR forum
Globalstar Site Visit
The visit was arranged by the Wireless Communication Alliance and held at the Gstar facilities (and satellite control center) in Santa Clara. A ten dollar contribution to the Alliance at the door got me a canned Coke - Tokyo
prices! Format was a presentation to the group followed by breaking up into smaller groups since the control facility can handle limited visitor traffic. The balance of the group stood out in the courtyard and ran up phone bills on Gstar phones supplied by sales personnel. I missed the control center tour preferring to spend time pumping information from employees. All employees have been carefully prepared, and many questions of interest to investors are referred to the Investor Relations office.
About 60 people attended, and all provided brief self introductions. Visitors ranged from grad students from a communication engineering class to CEO's of wireless start-ups to a fellow who sold his wireless company to Nokia and was taking some time off.
Presentation was by Ed Hirshfield, VP of Special Programs, formerly VP of Operations, also active during design phase. He was employee no. 4. Below I will interleave notes from the presentation plus additional tidbits garnered later on so it all flows a bit better rather than a straight transcription of notes and memory. Much of this is public knowledge, but there were some interesting bits of news.
Hirshfield's opening comments were that the technical and operational staff could not be more pleased with the system having exceeded all technical and performance objectives. The strong suggestion was that all technical issues were overcome, and it was a marketing job from here on out. He alluded to Globalstar II which is in planning stages, will have higher data rates, permit graphics via satellite, but all that was in the future.
- Gstar is a consortium of service providers numbering about 100 serving 125 countries.
- Business is defined as "cellular extension," providing service where cellular service is not economically viable.
- Owned 42% by Loral, 26% by you and me, and 32% by the service providers.
- Capability is high quality digital communications, 9.6 kbits/second initially, higher in future. Phone is CDMA, AMPS, GSM (if you want) as well as Satellite.
- 48 satellites + 4 spares at 900 km, coverage from 70 deg. north (Nome, Alaska) to 70 deg. south (beyond southern end of South America) but as yet no Alaska coverage because AirTouch has not yet made the investment in a ground station in that area (thus depriving Gstar of so good fishin boat business for the time being). In temperate latitudes, you are always in sight of at least 2 satellites, more usually 3 with soft hand-off between satellites. Power of transmission in both phones and
satellites is controlled to better than 1 dB to conserve power and adapts to satisfy data rate requirements. Data rates also adapt on the fly from 50 bits per second to 9.6 kbits/sec. depending on demand.
- Four layers: Space layer is all Gstar. Second layer is users with user owned hand sets. Third layer is ground support and ground stations provided by service providers. Final layer is the public telephone system world wide into which calls are patched as appropriate.
- System uses all cellular protocols which makes it very different from IRID. Think cellular extension.
- Satellites are small, 58" diameter by 70" long plus solar arrays making span of 423 inches, weight 450 Kg. System capacity is about 9-10 billion call minutes per year including reasonable assumptions about locality of calls over continents, geographic distributions, etc. [This
is a key number, IMHO. Gstar sells minutes for about 50 cents, so it implies that the system saturates at a revenue of about $5 billion per year after which more capacity is needed from improvements, satellites, or whatever.]
- Handsets from three suppliers. QCOM retained its Gstar handset business.
- Satellite antenna creates many selective beams and so can focus power on various locations as needed, and adjust beam power independently.
Antenna pattern is 180 degrees. This means that satellite coverage is 1800 mile radius for 10 degrees above the horizon. When I later asked about why the coverage stopped a short distance off shore, the reason given is business, not technical. Phone companies' territories extend
only 200 miles off shore by treaty. The open ocean has not been "claimed" by any particular phone company yet, but if one wants to build a ground station in Hawaii (for example) that would be their territory. In actual fact, if you are more than 200 miles off shore and place a satellite call, the system will accept it if it were an emergency.
- Satellites are designed to charge batteries over oceans (limited use area) and discharge over high use areas with some reserve capacity.
- Satellite life initially 7.5 years, but reliability has been excellent with no failures of any kind once on orbit. Lifetime now projected at 10 years. Station keeping requires less than 1 kg. of fuel per year. In theory the satellites can remain in stable orbit for hundreds of
years.
- QCOM has special form of CDMA for satellite phones. Handsets transmit less than 600 milliwatts at max. power, more typically less than 100 milliwatts. The handset tells the satellite what power level it is receiving, and the satellite adjusts the power level to maintain data
rate and error rate. The satellite does the same, transmitting data about signal quality to the hand set which adjusts the transmit power accordingly. All of this is done continuously. Phones are now $1200, weigh 300 grams, talk time is minimum of 2 hours, standby more than a
day in actual practice. Later we were shown prototypes of new phones which are much sleeker, smaller, better styled, and the new phones can receive in standby mode with the antenna retracted. Phone rings, you extend antenna, talk. New units out in 6-9 months.
- In outside demos, all the users commented that the voice quality was much better than normal cell phones. (I did not use the phones offered.) Connections were fast and crisp. These phones all had the satellite antenna that must be rotated out from the side of the handset. Only the top half of the antenna is active. The bottom half is to get the top half above your head. With full constellation of satellites in place, the phones generally work regardless of antenna
orientation unless you are at the absolute limit of range. The sales guy said he uses his in his London hotel by sitting next to the window, and Bernie Schwarz uses his in the corporate jet by sitting next to the window. Boat and car install kits with exterior antennas are now available. Also, sales guy noted that his satellite phone works throughout his wood house with composition shingles. Wood is not a problem. Your head (and other very wet things) is a problem.
- 300,000 handsets have been built, 50,000 are in the pipeline. Limit is not handsets, but market acceptance in the wake of IRID collapse. Several employees said they hoped for success of IRID as IRID would have broken the ice and they hoped to follow and provide better service at lower cost. What has actually happened is "Iridium was like the Titanic, and when it went down it left a lot of turbulence and vortices, and we are having to swim like hell to get out of the down draft. We have customers that want to know if we are also going to go bankrupt, it
the system works, and we have to overcome a lot of negativity." One thing they are doing is loaning phones to selected customers for a week.
All who have borrowed phones have bought them. Sales are accelerating to government agencies, emergency services, and many other types of users. There is no consistent pattern of user except that they are all out of cellular range. I also sensed some frustration that the service
providers are slow to install ground stations which is slowing roll out. Example above, AirTouch waiting on Alaska, deprives the company of what they expect will be heavy traffic from fishing fleets offshore of Alaska. Will now have to wait a year or more.
- Thirty eight gateways (ground stations) have been constructed, over twenty are installed and operational. Cost for land, building, antennas (4 big dishes) and all the ground stuff and interconnect to local terrestrial system is about $25 million per gateway. Satellite resources are controlled through gateways by satellite control in San Jose with a backup control station in the Sierra foothills 3 hours away "On another tectonic plate." Site of back up was chosen so that employees can travel to backup station in short time if the "big one" hits.
- Important issue is diversity of pathways and combining of signals made possible by using packets. Three satellites can be receiving from a single phone, and transmitting to a single gateway which combines the best of the signals to reconstruct the signal before forwarding it. Gateways track three satellites at a time, and the fourth antenna is
scanning for the next satellite to come over the horizon.
- Performance in terms of quality of service has been excellent. This is measured by each of the service providers in each of the companies using indigenous phone crews which take a handset and a black box to a
number of locations within the territory. These are deliberately "tough" being in mountains, under trees, etc. The black box makes calls, provides synthetic speech, and the box and system record the availability, success rate in connecting, connect time, and error rate of the transmission. This is done over time with hundreds of calls. In the US the connect success rate is generally over 95% in all locations and commonly over 98%. In China the success rates drop in some locations to the low 90% range. The frame error rate is typically about 1%. Connect times are typically 2-3 seconds. However, when you add all
the ground connect time for the terrestrial network for a call half way around the world, connect times can grow to 20-30 seconds, but not because of the satellite link.
- Current costs vary from 97 cents per minute domestic (introductory) rising to $1.18 per minute, to about $1.50 in some countries. Rates are set by the local partner. The Gstar revenue is about 50 cents per minute. Access fees will be about $20/month.
- The satellite system locates the phone within about 1 kilometer, and based on location, establishes the connection with the appropriate ground partner. Thus you can drive across a border a few kilometers, make a call, get the same satellites, but you will be connected with the
provider in the new country you have entered.
- Data rate can be increased, but at the cost of decreasing the number of channels available on the satellite. It is a software issue, and adjustable. Upper limit practically speaking is 2-4 times the current data rate. Globalstar II will have higher rates.
- On a negative note, it appears that the Globalstar personnel policies come directly from Loral and reflect old school aerospace attitudes towards employees. Thus stock options are restricted only to senior managers, and women are not as well accepted in the engineering department as they would be elsewhere in the high tech industry. It is
an attitude that is inappropriate for Silicon Valley.
- I discussed with an engineering manager the capability of the group to execute the technical task. Response was: excellent, the group is doing an excellent job in meeting its objectives, and is very capable. Retention of employees could be an issue, however, in light of the above, (my opinion).
My conclusion: it is not a technical question. It is a marketing question. And the roll out has been significantly held back by the Iridium failure contributing to FUD (Fear, Uncertainty, and Doubt) in the minds of prospective customers. Nonetheless, the sales ramp up is continuing at a rate that the sales folks describe as satisfying (although classified), and there appear to be enough users world wide to make the business profitable. But it will take time.
Disclosure: long GSTRF, and I plan to remain so. I think it is the only
10 bagger left on George's list.
Fred Moreno
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Satelite seems a little small, but visit notes are interesting.
Jack |
