Iridium hangs its hopes on $4,000 SatTalk phone
Iridium World Comm. Ltd. (IRID) Message List
Raging
By: lgeist
Reply To: 1188 by LastDays
Thursday, 16 Sep 1999 at 9:28 PM EDT
Post # of 1190
Iridium hangs its hopes on $4,000 SatTalk phone
by Stephen Pope
Beleaguered satellite telecommunications provider Iridium LLC, desperate to stem its flow of
red ink, is introducing a new satcom system for business and general aviation that will sell for
less than $4,000 and weigh just two pounds.
Billed by Iridium as "the lightest and most affordable aeronautical satellite telephone ever
built," the new SatTalk airborne phone would compete with AlliedSignal?s $30,000 Airsat 1
satcom system, using the same 66 low-earth-orbit satellites to send and receive calls to and
from just about anywhere on earth, but at lower per-minute charges.
The Iridium satcom system, which will be available through the Edmo avionics dealer network
this fall, uses a small portable satellite telephone from Japan?s Kyocera and three-inch
satcom antenna built by Sensor Systems. About the size of a common cellular telephone, the
Kyocera phone can be installed anywhere in the airplane and connected to its external patch
antenna through a mounting bracket, or it can be removed from the aircraft and used on
battery power as a handheld personal satellite telephone.
Pilots and owners of light general aviation airplanes, a key target market for the system, can
mount the phone on the control yoke and wire it through the audio panel for hands-free use
with any standard aviation headset. Offered as an option by Icarus Instruments of Takoma
Park, Md., which is engineering the handset mounts, will be cabin clamps that can connect
the phone with lightweight headsets for passenger use.
Icarus Instruments president Steven Silverman said the phone was originally designed for
use solely with a headset, but that flight testing demonstrated sound quality aboard quieter
turbine-powered airplanes was very good using only the handset. He also said testing of the
phone with the Sensor Systems antenna caused no interference with GPS navigation
signals.
"We?ve performed extensive tests to make sure the phone works well in the airplane and
does not interfere with GPS," he said. "AlliedSignal claimed it couldn?t be done [with the less
expensive handheld telephone], but we?re doing the same thing they are, and we?re doing it
for far less."
AlliedSignal said it tried to develop a less expensive Iridium satcom, but found that the
Kyocera and Motorola handheld phones both interfered with GPS signals and did not provide
an acceptable level of sound quality. Many pilots who have used handheld Iridium phones
while airborne, however, have reported voice quality as good.
Talk is Cheap
Depending on the type of service agreement SatTalk customers choose, per-minute charges
for calls within North America will range between $1.60 and $1.90 per minute and incoming
calls will be free, an Iridium spokeswoman said. To make the telephone more attractive to
fractional ownership and charter providers, Iridium plans to offer a hardware mod that will
allow bills to be routed to different accounts, she added.
News that Iridium planned to start selling a phone that would compete with the Airsat 1
telephone came as a surprise to AlliedSignal, which believed it held exclusive rights to
provide aeronautical equipment and services for the Iridium network, a spokesman said.
As the financially troubled vanguard in a new era of low-cost satellite telecommunications,
Iridium has had to make some tough choices during the past two years, however. There have
been shakeouts in senior-level management, financial restructurings and most recently the
Chapter 11 bankruptcy filing in a Delaware court last month. The decision by Iridium to
circumvent its sole-provider agreement with AlliedSignal was viewed by analysts as a blow to
Airsat 1 but a positive move for Iridium that may help it enhance its profile with Fortune 500
companies that operate business airplanes.
Iridium filed for bankruptcy protection just two days after the cash-strapped company
defaulted on more than $1.5 billion in loans. Iridium plans to continue operating through the
bankruptcy proceeding, but investors not convinced of the Motorola-led consortium?s ability to
remain afloat have been dumping the stock, which trades on Nasdaq.
Soon after the bankruptcy filing, Motorola, which owns 18 percent of Iridium, expressed
support for the venture and said it believed a financial restructuring plan would be introduced
by the middle of the month.
A key question on the minds of many analysts last month, however, was what will become of
other start up satellite communications providers such as ICO Global Communications
Holdings and Teledesic, which both plan to compete with Iridium for business customers
seeking low-cost satellite phones for use in far-flung regions of the world. If Iridium can barely
stay afloat, the analysts said, what will convince investors that new players will fare better?
For business aircraft operators who also are worried about the consortium?s long-term
prospects, the question in the months ahead likely won?t be which Iridium phone to buy, but
whether to buy one at all. But faced with a choice between the $30,000 system from
AlliedSignal or $4,000 phone from Iridium, buyers looking for a quick fix may opt for the
low-cost solution and simply hope Iridium emerges intact.
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