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-
- Title: A 'Ma Bell' for the space age. (Motorola Inc.
- plans the Iridium Project for satellite-based
- phone services)
-
- Authors: Kinni, Theodore B.
- Citation: Industry Week, March 21, 1994 v243 n6 p71(2)
-
- -------------------------------------------------------------
-
- Subjects: Telecommunications industry_Innovations
- Artificial satellites in
- telecommunication_Innovations
- Long-distance telephone services_Innovations
-
- Companies: Motorola Inc._Planning
-
- Reference #: A15259160
-
- =============================================================
-
- Abstract: The Iridium Project will cost $3.37 billion and
- employ 77 satellites to bounce phone signals from
- $3,000 cordless handsets to anywhere in the world.
- The project required innovative management changes
- and some company restructuring. The first satellite
- will be launched in 1996.
-
- =============================================================
-
- Full Text COPYRIGHT Penton Publishing Inc. 1994
-
- AMBITIOUS GOALS ARE FAIRLY COMMONPLACE at Motorola Inc. The
- well-publicized Six-Sigma quality initiative (requiring no
- more than 3.4 defects per million parts), a successful run at
- the 1988 Malcolm Baldrige National Quality Award, and a
- commitment to best-in-class employee training as
- characterized by Motorola University are just a few of the
- challenges the company has undertaken.
-
- The corporate emphasis on internal fundamentals has led to
- superior business performance-- Motorola cellular telephones
- dominate the U.S. market, and the company's pagers are even
- selling well in Japan's competitive marketplace.
-
- A company that pursues the future as aggressively as Motorola
- is bound to come up with big ideas, and in 1987 a small team
- in the Satellite Systems Engineering Group of the Strategic
- Electronics Div. came up with a whopper. The team's unique
- vision involved a networked infrastructure of low-level
- satellites orbiting the planet. This satellite network would
- offer the ability to place and receive calls from anywhere on
- earth, at any time, to system subscribers with a hand-held
- phone. They named the project Iridium, the element whose
- atomic number corresponded to the 77 satellites in the
- proposed networks.
-
- Although refinements in the system's design eventually
- lowered the number of satellites to 66, the potential and
- logistics of the Iridium Project remain staggering. The
- networked satellites, each weighing about 1,500 lbs, will
- orbit the earth on six different planes of 11 satellites
- each. They will travel longitudinally, ringing our planet
- from pole to pole, at an altitude of 420 nautical miles and
- completing a full orbit in 100 minutes. This low-level orbit
- (geostationary communications satellites orbit at 22,300
- nautical miles) allows high-quality transmissions essentially
- free from both delay and echo.
-
- The satellite network communicates with established telephone
- networks via earth-based gateways. Gateways consist of a
- collection of tracking dish antennas, which will be owned on
- a regional basis by Iridium investors. The antennas will
- locate the callers, route the calls, and save billing
- information on a continuous basis. The system includes a
- switching capability that ensures that calls are routed via
- the least-expensive route--earth-based lines, cellular
- systems, or the satellite network.
-
- To the Iridium subscriber, the mechanics of the network will
- be transparent. "You will subscribe to a local cellular
- service that is licensed with Iridium, buy a handset, and
- start making calls," explains John Winthrop, Iridium's
- director of corporate communications. The handset, which
- Motorola will manufacture, will be compatible with the local
- standards of the subscriber and the Iridium network.
- Pocket-sized, it is designed to operate for 24 hours on a
- single charge and requires only a short antenna because of
- the low level of satellite orbit.
-
- Initially, the cost of accessing the system will be high. The
- handset could cost up to $3,000, and calls on the network
- will average $3 per minute, Mr. Winthrop says. Conservative
- estimates call for 2 million users by 2002, consisting mostly
- of business, government, and the military. Eventually,
- however, huge markets are anticipated, especially in areas
- without existing telecommunications infrastructure. In
- Russia, for example, only 10 million phones serve a
- population of 250 million, and in India thousands of villages
- have no telephone service at all.
-
- Expertise in orbital mechanics, rocketry, satellite design,
- and cellular telephony are just a few of the skills needed to
- launch Iridium. The cost of the design, production, and
- launch of the satellite network is pegged at $3.37 billion.
- Once in place, the cost of operation and maintenance of the
- network over a five-year period will be another $2.8 billion.
-
- The potential rewards of Iridium are correspondingly large.
- The owners of the network will constitute a Space Age version
- of the pre-breakup Ma Bell. They will own an extraterrestrial
- telecommunications network designed to transmit international
- calls in an era when global wireless communications is a
- high-growth opportunity. How much is such a franchise worth?
- "The probable returns are extremely attractive," is all Mr.
- Winthrop will volunteer. Add on the $6.17 billion in
- production and maintenance contracts, and the scope of the
- opportunity becomes compelling.
-
- In June 1990, after two years of feasibility and marketing
- studies, Motorola's top management approved the project and
- the Iridium organization as it appears today began to evolve.
- A subsidiary, Iridium Inc., was formed to finance and manage
- the proposed network. In the first round of financing, $1
- billion was raised from 14 organizations that each now own
- from 5% to 15% of the company. These organizations include
- international supplier partners and service providers.
-
- Motorola retained the role of Iridium's primary subcontractor
- and controls the implementation and maintenance contracts.
- Within Motorola a new strategic business unit, the Satellite
- Communications Div. based in Chandler, Ariz. oversees the
- international supplier partnership.
-
- In August 1992 Iridium received an experimental license to
- construct and launch an initial network of five satellites to
- demonstrate the feasibility of the system. The first
- satellite launch is scheduled for 1996, and commercial
- service is expected to become available in 1998.
-
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