ELLIPSO LOSES LEO LICENCE

It seems another planned LEO service has hit the financial brick-wall.

Mobile Communications Holdings Inc. (MCHI), a Washington-based company planning to deploy the proposed Ellipso mobile satellite service (MSS) system, lost its license last week after the FCC found it had failed to meet a construction milestone requirement.

The company planned to launch and operate one of the so-called “Big LEO” services that would function in the band between 1.6 GHz and 2.4 GHz. Gerald Helman, an Ellipso vice president, said the company expects to review the FCC’s order closely and may file an appeal.

Bankruptcies of two Big LEO mobile satellite services that preceded Ellipso, along with the serious financial struggles of a third rival sapped the interest of Wall Street investors in backing these high-cost systems. However, Helman said he and his colleagues persevered because they thought Ellipso could become “successful” by pursuing a gradual rollout, controlling costs and charging prices similar to cellular services.

Ellipso failed in attempts to develop long-term partnerships and financing arrangements, first through Orbital Sciences then with Boeing. Opponents of MCHI’s bid for a licence in 1997 argued that the company could not be financed and did not deserve a licence. MCHI officials countered that they could not obtain financing without a licence.

The FCC ultimately decided to waive the financing requirement to give the system’s backers a chance to raise the money needed to proceed. Without a successful appeal of yesterday’s FCC decision, the window of opportunity appears to have closed for Ellipso to launch and operate its proposed 16-satellite system intended to offer two-way mobile voice and data communications.