As technological advances in space and on Earth lead to a new generation of handheld receivers, the prospect of mobile satellite services (MSS) breaking into the consumer mass market with a host of innovative services grows stronger.

In the beginning they offered voice. They also handled data, but speeds were slow and data throughput was limited to short bursts and simple text. And even voice often was affected by significant latency. MSS always has represented a significant part of the satellite business but, crucially, one that never really was expected to grow to the size and importance of its rich relations handling fixed data and broadcasting.

Yet, after years of technological research and continuous evolution in both the space and Earth segments, MSS players finally have an opportunity. Data speeds have increased to such an extent that mobile satellite broadband is now more of a norm than an exception. Meanwhile, enormous improvements in software and the design of terminals have given a new generation of satellite receivers the consumer appeal that in earlier brick-like terminals had been somewhat missing. In other words, appealing MSS handsets finally are about to make it to the consumer mass market.

"The MSS industry has evolved from transportable, heavy equipment carried in multiple cases; to portable voice and data services in suitcase-sized configurations; to handheld voice and data in a satellite phone," says Tom Surface, director of marketing and communications at SkyTerra Communications, parent company of MSS operator Mobile Satellite Ventures (MSV). "Next-generation mobile satellite services will continue this technological evolution."

With this leap comes great opportunities, namely operating on a scale unheard of for satellite; however, this paradigmatic shift also brings a new set of challenges. For satellite companies to operate in the consumer market, they will need to develop specific, highly sophisticated marketing strategies — which for them remain largely untested. In other words, for satellite this is a leap into the unknown.

The New Space Frontier

For years now, the telecoms sector has been in the eye of a storm that brought a revolution to an industry. The convergence of the wireless world with consumer electronics, the Internet, digital content and services has transformed what used to be an engineering realm into a market dominated by forces such as fashion, gimmickry and consumer behavioral analysis. As combined satellite-cellular communications are about to become a reality with the launch of ancillary terrestrial component (ATC) networks, also referred to as a complementary ground component, the same revolution is now due to hit the MSS sector.

Following an agreement between the companies involved, multi-mode mobile baseband chips that integrate satellite and cellular communication technology are being developed by Qualcomm for the two U.S.-based MSS operators, ICO Global Communications and MSV. In other words, satellite connectivity in North America will finally be enabled in mass-market wireless handsets and devices, as handset vendors will be able to produce satellite-capable devices at a scale and cost comparable to terrestrial equivalents. As satellites become an extension of the mobile terrestrial sectors, users will benefit from ubiquitous mobile communications coverage, including areas where traditional cellular service is currently unavailable or unreliable.

Qualcomm agreed in September to modify its 3G air interface by integrating satellite and cellular communication technology in select multimode mobile baseband chips. The chips, which are expected to be available beginning in 2010, will support the L- and S-band frequencies in which MSV and ICO operate and are expect to enable satellite connectivity for the first time in mass market wireless handsets and devices and produced at comparable scale and cost. Qualcomm, the leading provider of wireless chipset technology, will sell them to mobile device vendors. In turn, these will produce a full range of handheld and mobile computing devices capable of both terrestrial and satellite connectivity.

These developments are a long way from the early days of MSS, and a number of factors have contributed to make them possible. "There has been significant progress in the evolution of MSS over the past several years. Most notable are larger reflectors on more powerful satellites which enable a wider range of mobile devices with smaller antennas," says Christopher Doherty, director of media relations at ICO.

Technological improvements and advancements in satellite design are only part of the story, however. An equally important change in radio frequency use regulation also has paved the way for this shift to happen. "The operating rules for the MSS spectrum (in the United States, for example, rules which govern ICO’s S-band spectrum) have been made more compatible with mainstream commercial wireless operators’ use of comparable mobility spectrum. As a result, there are more opportunities for mass-market MSS-based services," says Doherty.

These long-awaited developments are exciting news for the industry, but is this anticipation going to be met by success in the marketplace? Is there a viable market for dual-mode satellite/terrestrial MSS? Experience shows it would be wise to withhold judgement until the devices are tested in the real world. Yet, even in these socialist-leaning times, the market faithful remain in numbers. "MSS players must keep focused on addressing user needs, whether it is by enabling new mobile applications, reducing equipment size and enhancing features, or keeping services affordable. In the end, market demand will determine how many providers it will support and which combinations of companies make the best business sense," says Surface.

Meanwhile, Europe also is following the U.S. example with similar groundbreaking technological innovation. Next-generation mobile TV and automotive services via satellite are soon due to be launched in Europe by Solaris Mobile, a joint venture between the two satellite giants Eutelsat and SES Astra. The services, which were demonstrated at the 2009 Mobile World Congress in Barcelona, will make use of the S-band payload onboard Eutelsat W2A, which was placed into orbit in April.

The system’s architecture is based on the DVB-SH (digital video broadcasting-satellite services to handhelds) hybrid satellite/terrestrial standard supporting a network that will offer seamless coverage across Europe. By using additional terrestrial base stations, the system will reach into tunnels, urban landscapes as well as indoor locations. Services are expected to include broadcast-quality live TV as well as linear and on-demand content delivered to devices such as mobile phones, vehicles, portable music and DVD players, game consoles, and other handsets. On both shores of the North Atlantic, satellite finally looks about ready to provide services to the consumer mass market but not all MSS innovations have to do with flashy, glitzy handsets or the promise of mobile video and similar bandwidth-heavy applications. A remarkable area of growth for this sector is coming from a completely different market segment.

Narrow is Beautiful

While many of the MSS systems originally were launched as providers of voice-only services, a combination of technological evolution, market demand and human ingenuity has led to their development in unforeseen ways.

This is the case for Iridium, for example, which is enjoying success with its fleet of narrowband data communications services for tracking of assets such as vehicles, cargo, packages, ships and people. "This evolution has developed Iridium’s fastest-growing line of business in a way never imagined by those who initially developed the original concept of the satellite constellation," says Liz DeCastro, a spokeswoman for Iridium.

This is a far cry from Iridium LLC, the company that Motorola launched in the late 1990s targeting global business travelers and that went bankrupt nine months after its handsets hit the market. Iridium Satellite LLC, which was born out of the ashes of the old Iridium thanks to the backing of private investors, has been focusing on market segments that actually need MSS: organizations needing mobile communications where no other forms of communications are available. The list of customers is extensive and includes the U.S. Department of Defense, first responders, maritime operators such as shipping companies, entities needing communications in the air such as aviation operators, and organizations needing to track assets in remote locations around the globe. This business model has worked quite well and Iridium Satellite just announced 2008 revenues of $320 million dollars. "Growth has been spectacular, and we believe we have truly served a market that needs and appreciates our offering," says DeCastro.

Meanwhile, the drive to continue to innovate this sector goes on. As Iridium is planning its next-generation satellite constellation, Iridium Next, it is also looking at diversifying, somehow trying to reinvent the very concept of MSS. In renewing its fleet — two contractors have been shortlisted for the job, Lockheed Martin and Thales Alenia Space — the company’s stated goal is not only to offer communications services at even higher speeds, but also to carry secondary payloads onboard the new generation of satellites. "These [payloads] could be developed for paying government or commercial customers needing to be able to conduct activities such as global situational awareness in space," says DeCastro.

Globalstar Inc., which forever will be linked to Iridium due to the business histories of both companies, already is moving toward launch of its second-generation satellites. Thales Alenia Space began production assembly, integration and testing of the first flight models in August. The first launches of the spacecraft are scheduled for later this year, and the second-generation satellites, expected to operate through at least 2025, and ground network will allow Globalstar to provide faster data speeds required to support a variety of next-generation IP-based services. The network also is designed to ensure backwards compatibility for customers, and Globalstar is evaluating next-generation commercial and consumer wireless services including push-to-talk, multicasting, duplex SMS, advanced messaging and the ability to support mobile video applications.

A new breed of hybrid platforms about to be deployed in space will open the way for a new family of services that today we can hardly imagine.

The Traditionalists

The MSS sector, however, is not limited to the launch of ground-breaking systems and services into new markets. Alongside these are the so-called traditional MSS operators: companies well-grounded in the market segments they have been serving for years. London-based global operator Inmarsat is perhaps the best known example of this breed. The company recently completed the deployment of global mobile broadband communications, following completion of its network-optimizing satellite repositioning program. The company now has three geostationary satellites of the Inmarsat-4 (I-4) generation of spacecraft, deployed over the Americas at 98° West, EMEA (Europe, the Middle East and Asia) at 25° East, and the Asia-Pacific at 143.5° East. This network supports a wide array of communication services, including the company’s satellite phone services — IsatPhone, LandPhone and FleetPhone handheld mobile voice and data services for vertical market customers.

Meanwhile, Inmarsat also is expanding its in-flight communications services to a level not seen since the now-defunct Connexion by Boeing was still operating — the latter offered broadband connectivity to airline passengers. While mass market remains the target, Inmarsat’s new offering is limited to low data rates supporting voice and other bandwidth-light applications, at least for the time being. As of February, passengers flying with European low-fares carrier Ryanair can use their own mobile phones to call and send SMS text messages, with Inmarsat providing the link to the ground. A miniature, low-power GSM base station installed in the aircraft cabin picks up the passengers’ mobile signals and connects them to the onboard Inmarsat satellite system. The service is provided through OnAir, an Inmarsat distribution partner based in Geneva. Ryanair says the service initially will be available on 20 of its Boeing 737 aircraft to customers of more than 50 European mobile phone operators. The Dublin-based airline plans eventually to outfit its entire fleet of more than 170 aircraft with the technology.

It is not yet clear how airline passengers will react to fellow travellers sitting next to them shouting in their handsets: "I am on a plane!" However, Inmarsat’s pragmatic approach to the service, "start low, and eventually grow it if the market picks up," is to be noted. Test the market, educate the customers to the new service and then build on the system when it proves to be successful. This is a far cry from the "build-them-up-and-customers-will-follow" approach of the satellite industry of the past: a sign, perhaps, that a new, customer-oriented approach is taking hold within the industry.

An Industry at a Crossroad

There is a lot of excitement within the MSS sector. Mammoth technological developments have occurred throughout the last few years, and, perhaps for the first time ever, satellites now have the possibility of becoming deliverers of mass-market services. "MSS providers must continue to provide service offerings that help end-users communicate more, better, faster. New satellite capabilities, in addition to new devices and service upgrades, will deliver appeal that will continue to engage customers," says DeCastro.

The range of services on offer grows by the day: mobile interactive media, machine-to-machine communications, integrated GPS, etc., and are enriching the more traditional voice and data service offering. For the future success of MSS, it is crucial that this process continues. "It is critical for the MSS industry to address the needs of the three major segments of the market — government, enterprise and consumers," says Surface. "For years, MSS providers have successfully addressed and served the needs of government and niche enterprise customers, meeting the requirements of size, speed, geographic coverage and security. The future rests in successfully meeting the needs of the consumer marketplace."

This, at best, will be a challenge, but one worth being picked up, as those who succeed will reap great benefits for years to come.