Combined satellite-cellular service moves a step closer to fruition as TerreStar and Skyterra make final preparations for satellite launches later this year. The next generation of hybrid mobile satellite systems (MSS), which combine spacecraft with an ancillary terrestrial component (ATC), is expected to provide unparalleled coverage and spectral efficiency for consumers, enterprise, government and public safety personnel.
     TerreStar Corp. is scheduled to be first out of the gate with TerreStar-1 slated to be launched in June. Constructed by Space Systems/Loral, the spacecraft is touted as the largest, most powerful satellite in commercial use. TerreStar-1 is expected to be operational by October, providing services to the United States and Canada via an all-IP 4G network which will be backwards compatible and will work with 2G, 3G and Wi-Fi networks.
     While no service launch date has been announced, TerreStar has inked a nationwide reciprocal roaming agreement with AT&T. “Until our 4G network is deployed we have the luxury of roaming on AT&T’s 3G network,” TerreStar President Jeffrey Epstein said. “The big difference is the 4G network is all-IP based, so there will be some features we won’t be able to provide on the 3G network. No one has rolled out 4G yet and when 4G is rolled out the phone will work.”
     While TerreStar always has intended to build, own and operate its ATC network, given today’s economic realities, they are focusing on a variety of channel partners and looking for creative ways to finance the infrastructure build-out. With funding from primary investors Harbinger Capital Partners Funds and EchoStar, work is progressing on the handset, air interface and base station technologies, with Nokia selected as the base station manufacturer. “Nokia is ready, willing and able to roll those base stations off the line,” said Epstein.
     AT&T’s certification of the EB/TerreStar handset, which will be made available to its enterprise customers and ultimately, consumers, is underway. The lightweight EB (of Finland) handset, designed to appeal to consumers, is similar in size to the Samsung BlackJack, though a bit thicker. In addition to satellite mode, the 4G handset will function as a GSM/Wi-Fi phone and have features such as a 3-megapixel camera, camcorder, MP3 capability, push-to-talk and GPS functionality. “We believe, as others do, that the next wave for satellite communications for MSS is to have widely accepted form factors and devices that the average user is familiar with,” Epstein said.
Intent on becoming a global player, TerreStar also has applied for S-band spectrum in Europe and is one of four qualified companies. If successful, TerreStar could leverage its handset and, potentially, the AT&T roaming agreement.
     Meanwhile, Skyterra Communications Inc., which in December rebranded its Mobile Satellite Ventures (MSV) units in both the United States and Canada as Skyterra, is on track to launch the first of its two L-band Boeing-built satellites, as early as the fourth quarter, with the second satellite to follow in the latter half of 2010. Each satellite covers the entire North American footprint, and construction is nearing completion on four satellite ground stations, two in the United States and two in Canada. Redundancy in space and the multiple ground stations ensure that no disaster, unless it is continental in scope, will take down the end-to-end IP 4G system.
     According to Chris Gates, Skyterra’s vice president of strategy, everything from the satellite to the ground stations is on schedule, with no delays expected. Operations are fully funded by Harbinger Capital Partners Funds, which is providing $500 million. Skyterra is not required to build its own ATC network system. Instead, potential partners could range from a terrestrial operator that requires augmented capacity on their network, to a new entrant seeking to deploy a green field network using the L-band spectrum. (Skyterra’s ATC spectrum authority extends throughout the entire United States in a single block unlike most CMRS spectrum.) Future announcements will focus on device development, specific products and service definitions, pricing, migration of its current satellite customer base, etc.
     When Skyterra received the first U.S. ATC L-band satellite license in 2005 existing satellite systems were not powerful enough to communicate with a small form factor device. They needed a huge antenna and significant power to communicate back up to the satellite. Qualcomm agreed in September to modify its 3G air interface by integrating satellite and cellular communication technology in select multi-mode mobile base-band chips. When the new chips become available in 2010, satellite connectivity will be enabled for the first time in mass-market wireless handsets and devices and produced at comparable scale and cost. Skyterra, TerreStar and ICO Global Communications are party to this non exclusive agreement with Qualcomm.
     Skyterra also is moving forward with its bid to acquire U.K.-based Inmarsat, which would allow Skyterra to expand globally. It will be a long process, as under U.K. procedures, Skyterra must first obtain U.S. regulatory approvals before an offer is made, said Gates.
     MSS/ATC hybrid networks stand to benefit not only from the recent advances in wireless air interfaces but from a growing demand for broadband and content-related services. “What’s easy to predict with certainty is substantial additional spectrum resources will be necessary to deliver lots of 4G services,” said Gates. “It’s clear that people want to take handheld devices with significant computing power and therefore data requirements, with them, and that’s been demonstrated pretty clearly in the marketplace. The ATC question is to some extent a demand for mobile data. We view that as exploding.”