How to Profit From a Satellite Communication Resurgence

Only 14 years ago, an innovative startup launched the world’s very first global satellite communication system. Using a hand-held wireless phone, the company’s customers could call anywhere in the world – from the streets of New York to the North Pole to the center of the Sahara Desert.

The sheer cost and scale of the project – which included more than 60 low-orbit satellites – captivated technology and space buffs alike.

“It was the boldest and most-expensive private space initiative yet undertaken,” the Smithsonian reflects, “a test of the post-Cold war notion that markets might replace government as the drivers of space exploration and development.”

The company’s formal launch in 1998 solidified it as a dot-com darling, ushering in a new digital world that would give everyone on Earth the ability to instantly communicate with anyone at the push of a button on a wireless device.

There was just one problem: The venture quickly became a failure of epic proportions.

Nine months after signing its first customer, the company filed for bankruptcy. The era of commercial satellite phones was over before it even began.

The hope and hype of a space-age phone system was gone, and the headlines disappeared. Few noticed when the U.S. Department of Defense – one of the company’s first customers – saved the satellite infrastructure. Even fewer noticed when a group of new investors bought the company and re-branded it. And almost no one realizes how profitable this new company has become. Or that a massive equipment overhaul is about to usher in a new era of breakneck growth in a world where people, ships, airplanes and even machinery demand constant communication.

A bankrupt company with an idea ahead of its time is not the end of this story. In fact, it’s just the beginning…

The dream of a seamless mobile communication network took shape in the late 1980s. It was an engineering team at Motorola that initially had the idea for this global communication service. As it was initially designed, the system called for a network of more than 60 low-orbit satellites to provide a wireless phone signal anywhere in the world.

The idea of a satellite phone service was quite revolutionary at the time. The fact that the concept had never been attempted created several barriers for the engineers at Motorola. For starters, no commercial enterprise had yet to attempt to launch low-Earth orbit satellites for a communications system. It was a logistical nightmare that even required international diplomacy to ensure that the satellite phones would work with every single phone system in the world.

Despite the scale of the project, progress was made. Motorola spun off its space-bound division in 1998. Marketing campaigns for the new brand proclaimed, “One World…One Telephone.”

Now, keep in mind that cellular service in the mid- to late 1990s was spotty at best. And at the time, there was a legitimate debate as to how the world’s mobile communications would evolve. This new satellite phone system was launched at a time when the developed world’s cellular connectivity was still bare-bones.

If you ventured outside a major city, there was little chance you would be able to find a strong cellular signal.
But in the end, you know how the satellite versus cellular story ends. Cheaper cell towers became more ubiquitous, while crippling debt combined with far too few customers doomed the satellite phone business model. According to Reuters, the company charged thousands for one of its satellite phones – and call charges topped $7 per minute. With cellular phone networks growing, the choice was a no-brainer for potential customers looking to stay connected on the go.

But after the bankruptcy, new developments kept the satellite idea on the backburner. The Department of Defense saw a use in the vast satellite network and kept them all in commission. In fact, it was the government that helped find investors to purchase what was left of the company in 2000 for $25 million.
From the rubble of a failed idea, a new venture was born. And so far, that $25 million price tag has been more than worth it…

Now, this company is no longer an ambitious startup trying to sell $7,000 satellite phones. In 2012, this communications company is looking ahead to new opportunities in a world that is becoming more desperate to connect businesses, machines and people.

We all know that cellular telephones are here to stay. But what about the places where cellular service isn’t an option? It’s a bigger piece of the pie than you might think. In fact, only about 8% of the globe is covered by cellular phone service. That’s probably far less than you imagined… but it’s true. So when it comes to connecting vast parts of the world where traditional wireless communications aren’t available, this company and its network of satellites is there to take care of business. The implications are tremendous. Aircraft passengers won’t have to turn off cellphones during their flights, thanks to the company’s connectivity options, according to Reuters. And that’s just the tip of the iceberg…

Machine-to-machine technology is also fueling growth. Commercial shipments, airlines, vehicles and even oil rigs need to be monitored. This makes up its fastest-growing division. With seamless connectivity throughout its satellite network, this company is earning new contracts from organizations beyond government intelligence.

Source : wallstreetdaily