Doubts as Iridium nears lift-off

GSM poses a serious threat to the first handheld mobile satellite service.

Iridium's launch of the world's first handheld mobile satellitete service. service (MSS) this month may be a shuttle to disaster, according to telecoms analysts, Ovum.

Ovum said Iridium and other MSS suppliers could be squeezed out of the market by a growing number of global communications alternatives.

In its report, The market opportunity for Mobile Satellite Services, Ovum says the Iridium project is threatened by the development of successful global systems of mobile communications (GSM) networks, which are likely to expand.

The report also cites as a threat the introduction of the WorldPhone, which will enable mobile users to roam between 80 per cent of the world's mobile networks.

WorldPhone will be available in 1999 and is expected to endanger Iridium in a few years.

Meanwhile, the launch of the third generation of mobile phone systems in 2002 and the continued roll-out of cellular networks will reduce the need for voice-based mobile satellite services.

The Iridium MSS will be sold by approved service providers. According to Alex Nourouzi, senior analyst at Ovum, constraints on the service mean users will not get a seamless transition between Iridium and cellular networks.

Nourouzi said Iridium had to address four crucial factors to ensure its success: the phone is too heavy; its provision of data at 2.4Kbps is too slow; it will have problems broadcasting inside a building or built-up area; and, at $3,000 per unit, with $3-a-minute tariffs, it is too expensive.

"The Iridium system was developed to enable international travellers to use a mobile anywhere in the world," said Nourouzi. "In the late 1980s that was a good idea, but the developers of the handheld MSS could not have realised the changes that have resulted in the development of GSM."