TELECOM Digest OnLine - Sorted: Iridium II: Is Satellite Radio Doomed?

Iridium II: Is Satellite Radio Doomed?

I was originally going to post this in answer to another posting, but
this goes off on its own tangent, so I'm giving it a separate thread.

When the original Iridium was being drawn up on the planning boards,
the accountants went over the numbers very meticulously. They
compared the cost of of an inconvenient bulky Iridium receiver with
the cost of an inconvenient bulky mobile-telephone receiver
(break-even). They compared the projected worldwide coverage of
Iridium with the miniscule footprints of mobile-telephone
transmitters, which were almost all located in a few major city
centres (advantage Iridium). They compared the horrendously high
cost-per-minute of Iridium usage with the horrendously high
cost-per-minute of international long distance (break even). Etc,
etc. After going through the entire business plan, Iridium looked
like a winner.

But the telecom industry changed between the drawing board and launch
pad. Inconvenient bulky mobile-telephone receivers were replaced by
dinky little cellphones. Cellphone companies built out their coverage
area to include almost all potential customers in the 1st world. And
cellphone and long distance rates plummeted due to competition.
Iridium was doomed even if it launched on budget and on spec. The
only major customers now are mineral exploration companies and US DOD
in really isolated places with no telecom infrastructure.

I'm sure that satellite radio went through much the same number
crunching under the eyes of watchful accountants 10 years ago. Back
then, we had reached the extreme limit of regular modems at 33.6
kbits/sec. FM-mono yes, but nowhere near good enough for FM-stereo
quality, let alone CD quality. Besides, if someone really wanted to
listen to it a lot, you'd need a second phone line, another $30/month.

Things change. A lot of satellite radio's target households have
broadband and can get "internet radio" now. Both satellite and
internet radio have to pay royalties. But internet radio only pays
incremental bandwidth costs over the net, while satellite radio has to
pay for a network of satellites to be launched and maintained in
orbit. Satellite radio requires an antenna or dish of some sort,
while internet radio is simply another item in your browser's bookmark
list. The car was supposed to be the last refuge of satellite radio
that internet radio couldn't touch. But 3G, WiFi, and WiMax are
showing that it can be done.

I think that satellite radio will be another "Pola-Vision".
Interesting technology that was rendered obsolete by other
developments as it came out.

Walter Dnes; my email address is *ALMOST* like wzaltdnes@waltdnes.org
Delete the "z" to get my real address. If that gets blocked, follow
the instructions at the end of the 550 message.

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