MSS
Inmarsat was the pathfinder satellite system for providing MSS, and it remains the largest, most solid, most profitable company in the business, according to Rusch. In the early 1990s, Iridium, Globalstar and others saw the success of Inmarsat and cellular and decided that a space based service could grow dramatically with handheld satellite phone service. While the two companies went through bankruptcies, the systems survive today thanks to carving out a niche of loyal customers.
"The MSS business has grown to the point where there are about 1 million voice subscribers," says Rusch. "The growth rates have been encouraging. Since the operators do not have to pay for [capital expenditures], the service prices are low. Another spike of MSS enthusiasm was produced by the belief that mobile spectrum has intrinsic value. The [U.S. F0ederal Communications Commission] has approved the use of terrestrial transmitters in conjunction with MSS as long as the spectrum is truly used for space-based service," he says.
But there are some problems with these assumptions, says Rusch. "Many investors assumed that MSS spectrum is nearly as valuable as terrestrial cellular spectrum. Consequently, the market value of several MSS companies increased sharply when the FCC authorized ATC (ancillary terrestrial component) in 2005. However, the capital expense for a system that has ATC must carry the cost of a space and terrestrial network. All of the companies expected that the established cellular companies would be interested in becoming strategic partners in MSS ATC systems. This has not been the case.... I am skeptical that there is a business for space-based cellular service in the United States using ATC. Successful deployment would require an established player to invest several billion dollars for the ancillary terrestrial component. That does not seem to be interesting to the cellular players. They do not value the encumbrance of satellites as a condition for using the spectrum."
Mobile TV
Mobile TV has not yet established a major market presence, but it represents a growth opportunity for the satellite industry. "Satellite-based mobile TV was a good concept for sports events, but it has not proven to be a hit with the public," says Rusch. "The fundamental technical issue is signal strength and bandwidth. Much smaller bandwidth is allocated for mobile TV service than fixed satellite television broadcasting. Furthermore, mobile service limits the number of usable orbit locations since every receiver detects all the satellites above it. Frequency reused by multiple orbit locations is not practical. The experience in Japan and South Korea showed that terrestrial repeaters were important. Japan did not install the repeaters and few subscribers signed up. Japanese service is being terminated. South Korea put in an extensive network of terrestrial repeaters and initially attracted a sizeable audience, but more recently the churn rate has been high. KT is having second thoughts about the service."
"The experience has been good in Italy, but so far the service has only been offered in Europe without satellites. European regulators envision satellite service as a means to augment holes in the terrestrial coverage patterns and will award licenses for the service," [but] it doesn’t look like this service will take off. The market is probably too small to support a satellite system, which is a shame," says Rusch.
Email
Comments
Print
Reuse
