Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: TUESDAY, June 26, 1990 TAG: 9006260271
SECTION: BUSINESS PAGE: A-3 EDITION: METRO
SOURCE: The New York Times
DATELINE: LENGTH: Medium
Today, Motorola Inc. will become the first company in the world to announce plans to build and operate such a phone system.
Company officials say Motorola intends to charge under $3,500 for a 25-ounce handset that would fit in an overcoat pocket and could allow the user to make and receive calls from the North Pole to Antarctica.
Current portable phones can be used only where radio antennas on towers and office buildings are close enough to relay the signal. They are of no use in many rural areas of the United States or outside major cities in the rest of the world.
Motorola's system, which it hopes to be operating in six years, calls for the company to supplement conventional radio antennas with a constellation of 77 satellites that would relay the calls, which would cost an estimated $1 to $3 a minute, said Durrell W. Hillis, general manager of the company's satellite communications division.
All the technologies for the system have already been developed and need only to be adapted for use aboard satellites, Hillis said.
But the plan faces significant financial and regulatory obstacles. Motorola estimates that putting the system in service will cost $2.3 billion over six years and is seeking partners to help in the project.
But space experts caution that the economics of a project like Motorola's are harder to forecast than the technical issues. Other companies have found that the initial investment and the operating costs of satellite systems tend to exceed expectations, said Kenneth A. Homon, the former vice president of planning for Satellite Business Systems, a failed effort by International Business Machines Corp. to offer satellite-based telephone communications between fixed sites.
Motorola says at least 77 low-orbiting satellites will be needed to ensure that one is within a line of sight anywhere on the planet and that a second comes over the horizon before the first disappears.
The company plans to begin launching in 1994 inexpensive 700-pound satellites built to last five years; it will own the satellites but will license the right to build handsets that use them.
Motorola has named the project Iridium, after the element that has 77 electrons orbiting the atomic nucleus.
Although calls could be made from one handset to another, Motorola expects that most users would place calls to conventional wire-line telephones or cellular phones served by ground radio towers.
Motorola says it will need at least 700,000 users to break even. After having consulted many international organizations about the proposed venture, company officials forecast that the system could attract as many as five million subscribers worldwide paying at least $100 a month by the year 2000.
by CNB