All: some big numbers predicted for G*, but also for I* (Thanks to Phillips Telecom)
MSN EXCLUSIVE: MOBILE SATELLITE MARKET
TO REACH $25 BILLION BY 2004
The race is on to capitalize on the dynamic growth in wireless communications services worldwide. How will mobile satellites
contribute to that growth?
The global economy will need increased communications capabilities, particularly that which can be implemented quickly. Mobile
satellite communications will lead the way to providing worldwide communications infrastructure, building on the tremendous
growth in mobile communications, creating a $25 billion market by 2004.
Below are excerpts from Leslie Taylor Associates' latest study, the 1999 edition of The Complete Book On Mobile
Satellites: Systems, Services & Markets. In this first installment of a two-part series, Taylor projects that mobile satellite
service subscribers, both voice and data, will increase from more than 400,000 in January, 1999 to more than 24 million by 2004.
In evaluating the market for mobile satellite service subscribers, Taylor divided her projections into market segments based on the
big low-Earth-orbit (LEO) systems and the Little LEO systems. Our first installment of this series will focus on Taylor's
projections for the big LEOs: Iridium LLC [IRID], Globalstar L.P. [GSTRF] and ICO Global Communications [ICOGF].
According to Taylor's study, the market for global mobile voice communications services totaled more than 100,000 by year-end
1998, including more than 70,000 Inmarsat customers and subscribers to regional mobile systems in the United States, Canada,
Mexico and Australia.
As Iridium completes its first year of operation in 1999, Taylor predicts the company will bring an additional 500,000 subscribers to
the mobile satellite industry. By 2000, Iridium will be joined by Globalstar and ICO - both of which are promising lower-priced
satellite services to subscribers.
...Iridium To Attract Initial Service, Numbers To Drop Over Time
Taylor predicts that by 2004, Iridium will have attracted nearly 4 million subscribers, primarily international business travelers and
cellular subscribers. Taylor says these two market segments play to Iridium's strengths, offering a premium quality service on a
global basis.
But over time, Taylor expects Iridium's prices gradually to fall due to increased competition. By 2004, Taylor predicts Iridium's
annual revenues will gross close to $10 billion-a number that reflects first-year revenues based on monthly charges of $35 per
subscriber, paying an average of $2.50 per minute. By 2004, Iridium's monthly charges are predicted to fall to $20, with a
per-minute charge of $1.30.
...Globalstar Responds To Failures With Aggressive Service Campaign
Globalstar's aggressive launch schedule for the next 12 months and progress made in building its ground segment earned the
company high marks from Taylor, which targeted a subscriber count of 4 million by 2003. Globalstar plans to have five gateways
in operation and nine gateways expected to be completed by the third quarter of this year. The company plans to begin providing
service in the United States, China, Canada, France, Italy, Russia, Argentina, Korea and South Africa by March 2000.
Taylor estimates Globalstar's largest number of subscribers will be international business travelers and cellular subscribers, with
the pay phone segment racking in about 9 percent of the company's subscriber base. Taylor said Globalstar will capitalize on its
lower price-per-minute and be able to ramp up its subscriber base relatively quickly - allowing it to jump from projected annual
revenues of about $1 billion by 2000 to $6 billion by 2004.
...Latecomer ICO Will Ramp Up Slowly But Prices Will Be Lower
ICO's space and ground infrastructure scheduled for commercial service launch in 2000 reflects a late-to-market LEO with a
pricing plan that may give Iridium a run for its money.
In late 1998, ICO teamed with German-based T-Mobile to permit customers to roam between GSM and AMP-4 networks long
before ICO's satellite were to be launched. Taylor says this will give the company valuable experience in dealing with customers,
resolving billing issues, addressing fraud and providing customer service.
By 2004, Taylor expects ICO's subscriber base to reach 2 million, reflecting a slower ramp up due to slightly higher prices than
those offered by Globalstar, but lower prices than Iridium.
Editor's Note: To order the $1,995, 333-page study, contact Phillips Business Information, Inc. at 888/707-5811. Look
for Part 2 of MSN's Report Summary on Leslie Taylor Associates study on mobile satellite systems in the next issue of
Mobile Satellite News dated March 18.
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