The concept of handheld satellite phones just refuses to die. Arguably it should have been DOA nine years ago when LEOsat pioneers Iridium and Globalstar promised the world ubiquitous mobile comms anywhere on the planet, only to discover the hard way that GSM's roaming capability was enough coverage for most people - especially for what Iridium and Globalstar were asking in terms of both handset prices and per-minute charges.
Yet both Iridium and Globalstar still survive. Nine years after both of them opened shop, the niche markets where handheld sat-phones found an audience - vertical markets like oil, gas and transport, governments, satellite news teams, etc - have proven to be stable enough to keep both companies in business, as well as smaller players like UAE-based Thuraya and Indonesia-based ACeS. Even as terrestrial cellular coverage grows (by mid-2007, 90% of the global population was living within range of a cellular network, according to Informa Telecoms & Media) demand for handheld terminals that can connect in the remaining dead spots continues to grow. The market opportunity is significant enough that even in the US, where cellular coverage is near-ubiquitous, the FCC has issued Ancillary Terrestrial Component (ATC) licenses in the US to TerreStar, MSV and Globalstar to offer handheld mobile satellite services (MSS).
But the handheld MSS saga took an even more dramatic turn earlier this year when Inmarsat - the maritime satellite powerhouse that served the vertical market niche with its Mini-M satellite phone service well before Iridium and Globalstar - launched its planned handheld MSS service in partnership with ACeS with a raft of distribution partners, including Chinasat, Evosat, Fono, MCN, MVS, SatCom Global and Stratos.
Inmarsat's timing arguably couldn't be better, according to satellite analyst firm NSR, which estimates the global MSS market will grow from 1.8 million in-service units in 2005 to more than 6.7 million units at the end of 2012.
Much of that will be L-band devices, and will be driven by aggressive and new unlimited pricing plans as more players (namely the ATC players in the states) enter the handheld MSS game, NSR says.
However, with both TerreStar and MSV not expected to get their satellites in orbit before 2009, it may be up to Inmarsat's new IsatPhone service to generate more immediate excitement. The trouble is, the more attention is refocused on the handheld MSS space, the less thrilling it starts to look, new players or not.
Turbulence for Thuraya"&brkbar;
The recent buzz over the handheld MSS revival originated from a couple of things: Inmarsat's interest in the sector and the success of Thuraya.
However, Thuraya's star appears to have waned somewhat. The company reported impressive growth in subscribers and revenues in 2002 and 2003 with the launch of US-led wars in Afghanistan and Iraq, two markets where cellular coverage simply didn't exist at the time. Since then, however, GSM services have been launched in both countries, and Thuraya has reportedly seen usage drop as a result. As a private firm, Thuraya doesn't release details on its finances, but an October 2007 report from market analyst TMF Associates estimates the operator's revenues plummeted 51% in 2006 to $158 million (from $328 million in 2005). Its ARPUs have also declined from $90 in 2003 to around $53 in the first half of this year, the TMF report says.