Apart from the niche market—the global business traveller—Iridium phones (the brainchild of Motorola Satellite Communications Division) will prove useful for disaster relief teams and other services such as border patrol and drug enforcement. No matter where you are, if you have an Iridium phone you can be reached anywhere, as long as you’re above water level.
Iridium will be far ahead of cellular services. Cellular communications have limitations, with different technical standards in the various regions. Though cellular companies are establishing roaming agreements worldwide, there are still areas devoid of cellular coverage, according to Robert Kinzie, chairman of Iridium Inc. in an interview with a specialised telecom magazine. Iridium, with its satellite signals which will cover 200 countries, solves all that.
Says J.H. Raja, managing director, Iridium India Telecom Ltd (IITL): "At a call rate of $3 a minute (Rs 105) and $3,000 (Rs 105,000) for the handset, it sounds very expensive. However, the rates will be cheaper than what are charged at five-star hotels. As more subscribers come in and the economies of scale bear fruit, the service will be cheaper."
Raja discloses that 26 key countries, including the US, Japan, Germany, Russia, China and India, have invested in Iridium and by the time the service starts, about 200 countries will be in it. The investors now number 60 and range from Italy’s largest telecom conglomerate to Japan’s second largest cellular operator to virtually all the Indian financial institutions. US- based Motorola, founder of Iridium and builder of the satellite system, is currently the largest shareholder with about 20 per cent stake.
Iridium’s idea was floated in 1987 but probably did not materialise all these years due to the initial scepticism about the venture: the technical complications with regulators in the countries where it would operate. In January ’95, the US Federal Communications Commission awarded Motorola a licence to construct, launch and operate the Iridium system, smoothening the passage for launch elsewhere too. Services in various countries will be provided through telecom authorities and service providers.
How does the system work? When an Iridium telephone is activated, the nearest satellite will automatically determine account validity and user location and track the location of the number called. Iridium phones will be able to interface with laptop computers, personal digital assistants, palmtop organisers and other communications equipment. A satellite usually sits at a spot relative to the earth in a geostationary orbit, focusing on a territory. Iridium’s low-earth orbit (LEO) system satellites—located 780 kms above the earth’s surface, compared to geostationary satellites’ 35,900 kms—will circle the globe, allowing more focused beams to be projected on the ground, thus providing clear and strong worldwide transmissions. The receiving antenna is small enough to fit on to a handheld telephone. Intersatellite and ground control links will take place on the Ka-Band frequencies, while telephone and messaging communication on the L-band frequencies.
Iridium faces competition from three players—Globalstar, ICO and Odyssey—who have announced their rollout plans and are close to launching their first satellites. Globalstar expects to start services in 1998, while ICO (initially called Inmarsat P) and Odyssey could follow a year later. ICO expects to invest about $2.6 billion in 12 satellites, Globalstar reckons it will spend $1.9 billion to launch 56 satellites.
"What’s heartening is that India has invested in Iridium. Between 1995 and 1998, it will have invested Rs 400 crore," says Raja. IITL, a joint venture between a consortium of Indian FIs and the US Network Management Group of Motorola, has invested $70-million in the share capital of Iridium. Investors include Infrastructure Leasing and Financial Services Ltd, IDBI, ICICI, Exim Bank, SBI, GIC, HDFC, LIC, SCICI and UTI.
IITL will be setting up an Iridium gateway for India and the SAARC countries (except Pakistan). Videsh Sanchar Nigam Ltd (VSNL), with its facilities set up near Pune, will operate and maintain the South Asia gateway to the Iridium system satellites.
By the year 2000, Iridium hopes to service 650,000 voice and 350,000 paging subscribers worldwide. Beam me up, Scotty.