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

Re: Iridium II: Is Satellite Radio Doomed?

Gene S. Berkowitz (
Wed, 16 Mar 2005 19:15:10 -0500

In article <>, Walter Dnes (delete the
'z')<> says:

> 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
> Delete the "z" to get my real address. If that gets blocked, follow
> the instructions at the end of the 550 message.

You have your bandwidth calculations all wrong. The satellites (and
the US domestic "networks" only have two and three birds,
respectively) are continuously streaming all ~100 channels. When you
make a net connection, you are consuming a large portion of you
available network bandwidth. Should everyone on your neighborhood
subnet attempt this, you'll reach saturation. The satellite broadcast
doesn't care if there's 1 or 1 billion receivers.

Then there's reach. Sure, an automotive WiFi connection might work in
an urban setting, but what about on an interstate, through the New
Mexico desert?


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