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Future in Satellite Phones

By Editor | December 17, 2006

Satellite telephones rely on technology that was initially developed for military purposes. Like the Internet, the use of this technology has witnessed a dramatic shift to commercial use but the military implications were again reinforced during the US conflicts in Afghanistan and Iraq. The Iridium system played a vital role in providing the commanders in Washington with real time data that was crucial for many victories. More than 20,000 troops were supplied with satellite phones for exclusive use by the Pentagon and as permitted by the US DoD. This makes it clear that the military is going to continue its dependence on satellite phone technology as much as civilians are crazy about new services on their cell phones. Another aspect of satellite phones is that local agencies like police, firefighters, medical emergency teams, and similar services can now be in touch with critical information on a real time basis.

Companies like Globalstar and Iridium that have satellite constellations are sure to profit from this expected boom in satellite phone usage. However, what is not clear right now is whether the civilian and military satellite phone service providers will remain united, as is the case with Iridium, or will they be specialized to separate the commercial and military users. This decision is about ten years away when the current satellite constellations will reach the end of their term. Another factor to keep in mind is that though Iridium has a $200 million contract with the Pentagon and hence a healthy user strength among government employees, it has still survived only by applying for bankruptcy to get rid of the massive debts that it has accumulated in building its 66-satellite constellation for providing this service. Even Globalstar has had to go through bankruptcy and lacking any contracts with any government agency, it is still trying to get out of its financial troubles.

What this means is that the two biggest providers of satellite phone services make investors worry whether this business should be provided with further capital or not. The next generation of satellites will have to be launched to keep the service going but so far, it is not clear whether that will really happen. Besides this, there are problems with receiving satellite phone signals while indoors or under a roof. Size is another issue, where cell phones have been consistently shrinking in size; satellite phones remain bulky and unfashionable to carry, making mass-market penetration difficult. Finally there is the matter of price. Regular cell phone services are so much cheaper than satellite phone services that only a very small percentage of users actually opt for satellite phones.

If investors step back from investing the next generation of satellites to continue providers like Iridium and Globalstar then the military too might face problems because they would have the phones but no satellite to serve as a signal gateway. This would leave the US government in the tight spot of having to either buy a satellite constellation or put up one of its own.

All that can be said at this point that the military reliance on satellite phones is far greater than civilian reliance and once again, like the original development was for military use, the government will have to take some definite steps to avoid losing this valuable means of communication.

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