IRIDIUM, THE SATPHONE IS STILL UP IN THE AIR
By Sucheta Dalal
The Indian Express
April 11, 1999
When Iridium, the Motorola led global conglomerate
deployed the first global satellite telephone last May,
it turned into reality the vision of connecting the
world through one telephone system and one number.
Having put together the complex system with its
constellation of 66 satellites and 12 relay stations
linked up to local networks around the world, Iridium
is realising that the battle is only beginning. On one
hand it is fighting to stay ahead of the rapid advance
of cellular technology and reach, on the other, its
survival depends on recoveries and fighting
bureaucracies around the world.
When Iridium began its sales pitch it was looking at
globetrotting businessmen on company expense, buying
its shoe-sized 'mobile' phones, partly because they
needed them and partly for snob appeal. But the company
is learning really fast, that the hypothesis was way
off the mark -- business executives are in no rush to
stay constantly connected to the world. Naturally,
sales are so way below expectation, that India's 100
subscribers are actually looking a decent number.
Indian sales began only in February this year, after
Iridium India Telecom barely squeaked through the
deadline for obtaining an operating license and then
struggled to get its telephone consignment cleared by
the customs department. ''We can't even offer a full
blown demonstration to clients, which is important for
an expensive service like ours'', says Jaidev Raja,
Iridium's India chief.
Last October, Iridium had anticipated worldwide sales
to touch 200,000 subscribers by year end; in 1999 the
old marketing plan is ready to be jettisoned. Instead
of snob appeal, it is industrial users who are showing
interest in buying the clunky Iridium handsets. But
that too depends on how soon Iridium can iron out
various problems and create affordable packages for
various groups. Clearly the $ 140 million global
advertising campaign, created after complex
international brain storming, will be discarded too.
Lets look at the Indian situation. Obtaining a license
and getting its telephone consignment cleared were only
the first hurdle. Getting subscribers used to the phone
is another matter. Apparently, in wide-open fields
Iridium works like a dream. Santosh Yadav, the gutsy
mountaineer who is aiming to climb Mount Everest for
the fifth time, has been given a phone to keep her
constantly in touch and test out the system -- it
works. Similarly, when two ONGC wells caught fire,
Iridium rushed a couple of instruments. ONGC is
apparently impressed enough to plan a large purchase.
So is the army, which is excited at the possibility of
better and easier communication with its remote
stations.
But for the global business traveller, Iridium is not
on the agenda. Iridium users are fast realising that to
be accessible to the world, they have to be out there
in the sun. No sooner are they inside a building than
the signals vanish. The company now offers users an
elaborate pager link; when inside a building, the pager
is still able to catch the signals, allowing the user
to rush out in the open and receive the satellite call.
Iridium's plans for cellular roaming have also not
materialised because VSNL has to make the modifications
which allow a roaming facility between different
international cellular protocols. VSNL needs permission
from the DoT to make the change, and everyone knows
that the DoT simply cannot be hurried into doing
anything. A subscriber from Bhopal found other
problems. ''Most people'', he tells me. ''simply cannot
reach me and those who can will never call unless it is
an emergency'', he says. That is because, anyone
calling an Iridium phone has to prefix the number by
dialing the '00' international code followed by the
'8816' Iridium code. This makes it an international
call. But even if one is willing to pay international rates,
there is no guarantee that the Iridium user can be
reached. The Iridium user has to be called from digital
exchanges, and each of these exchanges has to
physically make a change in its programme to be able to
'speak' to the Iridium phones. Obviously, Iridium is
focussing on the larger cities, because there is little
chance of Iridium phones being called from hick towns.
Iridium India is now focussing mainly on the industrial
user market. But clearly its marketing has to be
adjusted for the prohibitively expensive cost of the
calls. The next problem is recovery. If selling the
global service is tough, getting users to pay for it
may be Iridium's toughest challenge yet. For starters,
it is trying to learn from the mistakes of the cellular
phone operators. Iridium asks its subscribers to have
their companies pass a board resolution permitting the
subscription. ''We are only trying to check if the
phone bills are going to be paid from capital or
operating expenses, so that we can assess credit
risk,'' says Raja.
Iridium's problems in India are bound to be replicated
in several other countries. One can only say that
dreams sometimes get tougher when they turn into
reality. For the consortium of Indian institutions who
have invested in the project, the chances of returns in
the near future are fast turning into a dream.
Not for commercial use. Solely to be fairly used for
the educational purposes of research and open
discussion.
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