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To: Jon Koplik who wrote (5372)	6/25/1999 9:07:00 AM
From: Sawtooth	Respond to of 29987

Friday June 25, 7:15 am Eastern Time INTERVIEW-ICO eyes slice of satellite phone market By Jacqueline Wong SINGAPORE, June 25 (Reuters) - ICO Global Communications (Nasdaq:ICOGF - news) is on track to launch satellite phone communications next year and hopes to take about a quarter of the new market for such services by 2005, a senior executive said on Friday. Michael Rugala, ICO's Asia Pacific regional general manager told Reuters he saw satellite phones complementing, rather than competing with, land-based mobile communications. Referring to analysts' reports of an estimated one billion mobile phone users by 2005, he said ''what we are doing is piggy-backing off of that.'' Satellite phone users were seen comprising about two to three percent of total mobile users by then. ''We expect to get generally about 25 to 30 percent of that, if there is more competition, about 15 to 20 percent,'' he said. Rugala said new generation satellite phones would be pocket-sized and comprise dual functions, channeling users to satellite only when land-based connections were unavailable. ICO would provide mobile communications by satellite, including digital voice, data, fax and messaging and expects to begin commercial operations in the third quarter of 2000. London-based ICO, the third satellite service provider after Iridium World Communications Ltd (Nasdaq:IRID - news) and Globalstar Telecommunications Ltd (Nasdaq:GSTRF - news) would have a constellation of 12 medium earth orbit satellites. Rugala said that technically, medium-distanced satellites provided the widest and most seamless coverage. ''We have a higher footprint,'' Rugala said, noting that users should always be within the coverage footprint of at least one satellite for extended periods of time. Rugala said there was growing demand for satellite phones to cover areas where setting up fixed line infrastructure was not cost-effective. ICO expects its key markets in Asia to be China, Japan, South Korea and Australia. He said ICO had a competitive package for domestic and international calls, and in time, with higher traffic volumes, prices for the service and phones would be lower. The dual mode handset, capable of working on satellite and cellular networks, costs under $1,000 while call rates were $2-$2.50 for international calls and $1-$1.25 for national calls. ''We're very conscious of making these as affordable as possible...we also think there will be a large rental market.'' Iridium slashed its prices by as much as 65 percent on Monday in a bid to woo customers to its network. Meanwhile, Moody's Investors Service downgraded ICO senior unsecured debt ratings to Caa2 from B3 on Tuesday. Moody's said the cut was prompted by ICO's difficulty in raising funds to implement its business plan. To date it has secured about $3 billion of the $4.7 billion needed to deploy its satellite network and start services. Rugala said ICO was making progress in signing with Asia Pacific service partners ahead of its launch and had rolled out an ''inter-standard roaming'' service for cellular operators. ''It's getting very good reception (from operators), plus it enables us to talk to them about ICO satellite services.'' The roaming service allows users of international digital phone standard GSM (Global System for Mobile Communications) to keep the same phone number when travelling in the United States. biz.yahoo.com