Walter Purnell, president and CEO of Motient Corp. [MTNT], recently sat down with MOBILE SATELLITE NEWS to discuss the role that a terrestrial wireless data network has played in a satellite company, and the role that the two will play in the future of Motient. Here is what he had to say:

MOBILE SATELLITE NEWS: How did Motient, originally a satellite company, end up acquiring a terrestrial wireless data network?

Walter Purnell: In ’95, IBM [IBM] sold their share of the [Ardis] venture to Motorola [MOT] and Motorola asked me to step up and run the [venture]. We were looking for opportunities to sell it and in 1998 American Mobile Satellite Corp. bought Ardis and integrated it into the company.

It was interesting why they did that because American Mobile had started out as a satellite voice system. About four or five years ago the board realized that there was a small niche market for voice and it probably wasn’t going to go far, as the two others have found out. Management started redirecting the company, moving it toward satellite data. One of the first things they did was acquire from Rockwell a business unit that was working with Ardis. That is how they came to know us. Consequently, when Ardis was for sale a year or so later, American Mobile picked up Ardis.

Now, we really have three businesses. We have the terrestrial data business, a mobile satellite business, and a media business because we have a significant investment in XM Satellite Radio [XMSR]. That terrestrial business has become the larger and larger share of our business because of signing some significant accounts and the offering of new services such as eLink.

Our business has changed quite a bit and we now see our path clear to cash flow positive in a few quarters and each of the pieces of our business is progressing very well.

MSN: When you look back during the past 10 years, did you envision the wireless data market to be where it is today when you started with Ardis?

Purnell: No, actually I envisioned a lot more. Unfortunately, I was part of putting together the original business plan and we were all convinced that wireless data was going to take off quite a bit sooner that it has. Now in the last two years it has finally started to happen. It really took five or six years before the device made serious moves toward affordability.

MSN: Was that the only thing that hindered the development of wireless data?

Purnell: That was the biggest one because most companies just could not afford that up-front capital. When IBM first got into wireless data for their own field service, they spent several hundred million dollars to equip their people. Those are big numbers. Most companies simply can’t afford that.

MSN: Looking forward to the next 10 years, where do you see the market going?

Purnell: Well, I think now the point of affordability has been reached. I think you are going to see paradigms that you saw with paging and cellular phones. It is now down to where the small business person and the individual can afford this and I think you are going to see extremely rapid growth.

I think we are uniquely positioned to take advantage of that because our network is in place whereas the rest of these folks are talking about what they are going to do over the next three to five years.

MSN: Do you see satellites playing a role in this expansion?

Purnell: Absolutely. We are on both sides of the satellite game and the biggest money winning satellite proposition is broadcast. XM Satellite Radio does that. The neat thing there is you don’t have to worry about capacity. You just broadcast and you can talk to as many people that have receivers that you need to. That is a better economic proposition. The two-way communication satellite is a little tougher, and satellite voice was a tough way to go. Look at our satellite customers. They tend to be niches – forest services, emergency management, oil and gas – people who don’t have an alternative. Well there aren’t many people who are in places that don’t have an alternative. As we move to data, two-way satellite fills a very important niche of being able to fill in the empty spaces where nobody would economically want to put up a terrestrial system. That works great in our transportation solutions. There is a role for two-way systems.

MSN: Have you found that, at least on the satellite side of your business, that the Iridium situation has caused any problems in your ability to expand?

Purnell: Iridium caused me two problems. First, they were stealing my people and now they are blocking my front door for those trying to get a job. Iridium was a significant recruiter for a while and made it difficult for me to get the resources I needed. That has pretty much gone away now. [Now, the failure] has made people a little bit nervous, because we are always trying to explain to folks that we are not in that situation. We have real customers. We have real revenues. We have financing capabilities. And it worries customers too because they don’t want to sign up for something that they think might go away.

MSN: Did the Iridium bankruptcy prompt you to change your name so people would not draw a parallel between your company and Iridium, especially considering Iridium was a mobile satellite company as well?

Purnell: Actually, yes. We tried to just drop Satellite and go with American Mobile. As it turns out as a corporate name it was not protectable because it was too generic. So we referred to ourselves as American Mobile, but everytime I go speak at a financial conference, they put me on the same panel with Iridium and Globalstar and those were some panels the last couple of years. So we wanted to break from that and get a shot at creating a new identity that calls to mind the major thrust of our business which is not satellite voice.

MSN: What is next in line for Motient?

Purnell: I think what you are going to see now that we have changed our name you are going to see a lot more public awareness. We have been sort of reluctant in spending money on branding American Mobile because people did not understand what we did. They kept associating us with that satellite voice system, which is still a piece of our business but a declining piece. We really wanted to create a new image and a new public awareness built around our ownership of the data satellites, XM Satellite Radio and the terrestrial networks.