THE MYTH AND REALITY OF MOBILE SATELLITE COMMUNICATIONS

SAMUEL W. FORDYCE and WILLIAM W. WU CONSULTARE, INC., 6701 DEMOCRACY BLVD., SUITE 300

BETHESDA, MD, USA

ABSTRACT Proponents of mobile satellite

communications cations predict a future in which telephone calls could be made to hand-held mobile terminals, located anywhere in the world. This possibility of commu- nicating anywhere, anytime with hand-held telephones could revolu- tionize the telecommunications business. These proposed systems are expensive, and face formidable competition. Many are not commer- cially viable, and their proponents are pursuing a myth. This paper describes the current situation, and the realities of mobile satel- lite communications.

BACKGROUND Mobile radio communications

have been in use for almost 100 years. When the "Titanic" was sinking in 1912, distress calls were broadcast by radio. Communi- cations between small fixed termi- nals have been in common use for even longer periods.

Satellite communications to mobile terminals were demonstrated to be feasible soon after the first geostationary satellites were tested in the early 1960's. Com- munications satellites providing Fixed Satellite Service (FSS) sup- plied commercial communications between fixed points on Earth as early as 1965. The geostationary satellites furnished nearly global coverage, and were used to augment submarine cables across the oceans.

Communications satellites oper- ating in the Mobile Satellite Ser- vice (MSS) competed with marine radios. Ships in line of sight of one another or harbor terminals use VHF (Very High Frequency) radio, which has a limited range. Over- the-horizon communications needed

for ocean-going ships used HF radio.

The first commercial satellites providing communications to ships were the Marisat 1, 2 , & 3 launched in 1976. In 1979 these satellites were leased to Inmarsat. Inmarsat has reduced it smallest mobile terminals to the size of a brief- case. These Inmarsat-M terminals can provide communications to any point on Earth (except the polar regions). Inmarsat has extended its coverage to aircraft, and to mobile land mobile terminals. Inmarsat satellites now can commu- nicate with hand-held terminals as small as portable telephones.

Currently, the cost and mass of mobile satellite terminals has lim- ited access for most subscribers. The briefcase-sized terminals weigh about 12 Kg., and cost about $25,000. The circuit costs ranges from $ 5 to $10 for a voice link, with a monthly subscriber cost of $ 4 0 . These high costs have limited the growth, but nevertheless, the growth rate is 50% per year for land mobile satellite service.

used for satellite communications required large "dish" ref lectors. The geostationary satellites avoided the need for expensive automatic tracking of these anten- nas. The low altitude orbits decrease the range to the satel- lite, which reduces the signal loss, and permits the mobile termi- nals to use smaller, nearly omnidi- rectional antennas. These broad- beam antennas don't require track- ing, and reduce the advantages of the geostationary satellites.

system with four Inmarsat-2 satel-

The original earth terminals

PRESENT SITUATION Inmarsat now has an operational

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lites in orbit. Inmarsat has 72 members, and owns the space segment (the satellites). The individual members own many shore stations, which are based in their home coun- tries and provide interconnections to the terrestrial communications networks.

The customer base is 31,000 user terminals, and the revenues in 1993 are almost $400 million.

Inmarsat provides voice, fax, data, and telex communications to mobile vehicles, plus to a number of stationary "temporary" remote- area terminals. The maritime mar- ket is approaching saturation for large ships. The aeronautical mobile market has grown to include about 350 airplanes. This market has developed slowly in comparison to the maritime mobile market. Both the maritime and aeronautical markets may be small compared to the potential market for land mobile satellite communications. The opportunity of providing satel- lite communications to land vehicles on a global basis has encouraged competition.

market for the land mobile satel- lite service, and the possibility of supplying this market with a galaxy of low-altitude satellites has led many companies to enter this market. None of the prime contractors are planning to go it alone on these large scale pro- jects, and efforts are underway to form consortia. The return on investment will be a major concern for all investors in the consortia, and the satellite systems are char- acterized by large initial costs with slow-growing revenues. How- ever, the first operating systems may capture the market and squeeze out the later entrants.

While the mobile satellite com- munications plans are forming, ter- restrial mobile radio service is rapidly expanding in metropolitan areas all over the world. Because of "robust" signal margins, terres-

The promise of a huge global

trial radio has an advantage in reaching mobile terminals inside shielded buildings. About 30 mil- lion cellular phones are in use world-wide, a number expected to grow to 100 million by the year 2000. In addition, many terres- trial radio dispatch and paging systems are operating, at lower cost than the cellular systems.

MARKET ESTIMATES Numerous market estimates have

been made for systems providing service to users with terminals no larger than cellular telephones. Inmarsat studied a system with a capacity of 2.4 billion minutes of annual communications traffic, generated in areas which are not well covered by cellular radio. Only 15% of the earth's land sur- face will be covered by terrestrial mobile radio (cellular) communica- tions, which may be incompatible, and may not allow connectivity.

annual revenues of $4 to $8 bil- lion, serving 4 to 7 million users by the year 2005. The type of people expected to use mobile sat- ellite communications include:

Inmarsat foresees a market with

1. Global roamers 2. National roamers 3. Callers from under-developed

areas without adequate telephones. 4. Government agencies (emer-

gency services, law enforcement, public safety).

The hand-held ground terminal prototype (Inmarsat P terminal) weighs only 350 grams, with a transmitter power of 250 milli- watts. The terminal transmits at 2.4 GHz, and receives at 1.6 GHz. The terminal will cost $1,500, with a service subscription of $40/mO., and a telephone charge of $2/min.

COMPETITION TO INNARSAT As a multi-national consortium,

Inmarsat enjoyed an initial mono- poly on satellite communications to ships (at sea), and later for air- craft flying over oceans. In the land mobile communications market, Inmarsat must obtain permission

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from each nation in which it plans to operate.

Many nations will exclude Inmarsat coverage, in order to protect the new domestic land mobile satellite service companies. They would like exclusive coverage out to the 200 mile limit from land, which would cut into Inmar- sat's maritime market.

The U.S.'s Federal Communica- tions Commission (FCC) has received a number of applications to provide mobile satellite service and Radio Determination Satellite Service (RDSS) within the L and S Bands allocated for these purposes. These applications include:

constellation Communications:

Ellipsat Corp. : "Ellipso. I'

Loral Qualcomm Satellites Ser- vices : "Globalstar. 'I Motorola Satellite Communica-

TRW Inc. : "Odyssey. 'I American Mobile Communications

Corp. : "AMSC . 'I Celsat Inc. : "Celsat . 'I

global communications to mobile terminals will be provided through Inmarsat for at least 15 years.

both have L-Band transponders pro- viding regional coverage on their Optus and Solidaridad satellites.

Several satellite companies are providing Ku-Band communications to markets formerly reserved for Inmarsat. PanAmSat is providing links to cruise ships, and Norsat B is providing high data rate links to off-shore platforms in the North Sea.

is available in most developed areas for parked land vehicles, and the radio dispatch and paging sys- tems have extensive customer bases. The rapidly growing cellular radios are covering much of the area coveted by the mobile satellite services. The fixed satellite ser- vice has been able to reach small transportable terminals.

Cons t e 11 at ion. I t

tions, Inc.: "Iridium."

Currently, Australia and Mexico

Terrestrial telephone service

Other communications services intend to compete for the market targeted by the land mobile satel- lites. Firstly, where telephone service is available, people can park their vehicles and use the telephone. Secondly, terrestrial radio dispatch and paging systems have extensive customer bases, and the cellular radio systems are growing rapidly. Thirdly, the fixed satellite service can reach transportable terminals.

Inmarsat may choose to forego its monopoly status in order to be allowed to compete in the land mobile market.

LIMITS TO GROWTH The growth of mobile satellite

service will be limited by con- straints of the market, especially competition from terrestrial radio and telephone services. Cellular radio service began in the early 1 9 8 0 ' ~ ~ and after 10 years of oper- ation has more than 25 million sub- scribers. By the end of this decade, cellular radio will be available to 93% of the people in the U . S . , although only half of the land mass will be covered.

The MSS (Mobile Satellite Ser- vice) cannot compete directly with the robust signals provided at low cost by the cellular systems. These robust signals allow penetra- tion of buildings, and reduce fad- ing and interruptions as the mobile terminals move through cities. The cellular radio terminals can be removed from the vehicles, and used inside buildings. The hand-held mobile terminals are limited to transmitter powers of about 500 mw, because of concerns of biological hazards resulting from exposure to radio waves. The use of whip antennas precludes boosting the radiated power with antenna gain.

with much shorter ranges than the satellite systems, and can withstand more attenuation through buildings. Where needed, addi- tional base stations can be added

The terrestrial systems work

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in weak signal areas. Obviously, most of the hand-held terminals will be used in the work place, which is usually under roofs.

must co-exist with the cellular systems, and offer additional fea- tures such as extending the cover- age to remote regions to compensate for the poorer and more costly service.

The growth of these services is also limited by regulatory problems in obtaining licenses, and by the availability of radio allocations. The current L-Band allocations are adequate for only a few mobile satellite systems. The recently- allocated S-Band must share with the RDSS (Radio Direction Satellite Service), and are not immediately available. Additional allocation must come at the expense of compe- ting radio services.

With these limits in mind, potential investors should be con- cerned. However, the stakes are so high that some of these ventures could become dominant suppliers of global communications. These ser- vices have been generating huge revenues, but the circuit use has undoubtedly been constrained by artificially high prices. The survivors in the mobile satellite communications will need patience, extensive resources, and experience in the communications business.

OPERATING ORGANIZATIONS The International Maritime Satel- lite Organization (Inmarsat), was established in 1979 to supply mobile satellite communications to ships.

Global coverage is provided by 4 Inmarsat-2 satellites. 4 Inmar- sat-3 satellites, scheduled for launches starting in 1995, will provide L-Band transponders which can switch between spot and global beams. Inmarsat services 31,000 user terminals, and has revenues of $373 million in 1993. Inmarsat expects to service 70,000 terminals by 1997.

The mobile satellite systems

Some of the Inmarsat management believe they can compete better in domestic markets for these services as a private company, rather than as an international consortium.

PROPOSED SYSTEMS Most of the proposed mobile

satellite communications systems offering global coverage plan to use low or medium altitude orbits.

The geostationary satellites will have the difficulties of the time delay, which ranges from 250 to 270 ms for a one-way trip. The processing time to achieve 4.8 kbps digitized speech is approximately 60 to 80 ms. The time required for a question and a reply is at least double this, or 620 to 700 ms.

Delays greater than 500 ms are noticeable, and "double hop" trans-

missions requiring 1.24 sec. are objectionable. The lower alti- tude satellites will have an advan- tage with shorter delay times.

All of the satellite systems will have lower signal margins than are used on the terrestrial mobile systems. In practice, more satel- lites will be needed to in8ure mul- tiple pathways so that blockages (signal interruptions) are less likely.

The LBO satellites have only 2.5 to 5% of the Earth's surface in view. Consequently, they need many satellites to insure that one or more can "see" any user terminal. The lower altitude requires many gateway stations to provide access to the terrestrial networks, or alternatively, inter-satellite links to reach a satellite in sight of a gateway station. The angular rates of the LBO satellites are high, they move across the sky at rates of 10 to 20 degrees/min. These high angular rates mean that the satellite is in view for only a short time, and frequent hand-overs to the next satellite are.required.

munications services. Current mobile satellite service charges from $5 to $10 per minute, and

Cost is critical for mass com-

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serves 30 thousand subscribers. Cellular radio service charge $0.11 to $0.90 per minute, and serve more than 30 million subscribers.

Estimates of the cost per cir- cuit-year of six of the proponents of mobile satellite systems are shown in Table 2 .

by the mobile satellite systems in terms of circuit costs per min., and the cost of the user terminal are shown in Table 3.

The proposed cost of services

FUTURE DEVELOPMENT Inmarsat is committed to the

deployment of the Inmarsat-3, which can provide global communications to small mobile terminals for at least 15 years.

Regional communications to mobile terminals will be provided by a number of regional Satellites in the U.S., Canada, Mexico, Aus- tralia, and probably a number of other regions. These regional sat- ellites may coordinate to provide communications to user terminals.

One or more of the satellite systems proposing competition to Inmarsat by providing global cover- age of briefcase-sized or hand-held terminals will probably be imple- mented. About 70% of the cellular terminal sales are for hand-held telephones. These will include dual-use terminals, which can access either the cellular radio or the satellite systems.

The spread of the PCS (personal communications systems) may change the way people communicate. The ability to communicate from virtu- ally anywhere to anyplace would allow calls to be made to an indi- vidual rather than to a location. A portable telephone for every sub- scriber, with radio links to these portable telephones would permit this. The U.S. now has 20 million cordless telephones, which permit limited mobility in the vicinity of a fixed telephone, and 8 million pagers, which permit more mobility. The cellular radio telephones have encouraged this trend to mobile

communications, and 30 million of these telephones are expected in the U.S. by 1995.

A goal of the PCS is to provide each user with a portable, light- weight instrument which will pro- vide access to a wide-spread public network. PCS is intended to pro- vide each user with the ability to communicate from anywhere - "one person, one phone." The service will be primarily voice signals, but provisions will be made for data, fax, paging, broadcasting, and video. The main challenge is to provide reliable, high-quality, two-way voice to a small portable terminal which can be reached anywhere, at a cheap enough rate to make it feasible for personal as well as business use.

The PCS seems a reasonable extension from the telecommunica- tions technologies which require subscribers t'o be in a particular place. With t'he allocation of additional spectrum, the PCS can be extended to metropolitan areas. The satellites could permit a fur- ther extension to global coverage. If PCS develops the way its propo- nents believe, there will be a need for these mobile satellite systems, and the market may grow to the extent expected by their propo- nents. If the costs prove to be too high, the PCS could be limited to metropolitan areas, and few sub- scribers could afford the mobile satellite service.

REGULATORY MATTERS The regulatory situation is an

unknown hurdle for the proposed mobile satellite systems. In many administrations, the status quo will be defended to prevent effec- tive competition.

FREQUENCY ALLOCATIONS The L-Band spectrum used for communications between the

mobile terminals and the satellites is limited. The narrow band cur- rently allocated will probably sup- port only three mobile systems. Future growth depends on increasing

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this allocated bandwidth. The development of mobile sat-

ellite service (MSS) has been ham- pered by the lack of adequate frequency allocations. Communica- tions between the satellite and the ship use "L-Band" frequencies. The "up-link" uses 1525 -1559 MHz., and the "down-link" uses 1 6 2 6 . 5 - 1660 .5 MHz. All of the signals in the MSS must be squeezed into this 29 HHz Band. Because the mobile terminals are small, and do not have narrow-beam antennas, the sat- ellites must be widely-spaced to avoid r-f interference.

lems, the "Big LEO" systems face regulatory problems. The limited bandwidth ( 2 8 HHz) available in the L-Band Mobile Satellite Service (MSS) spectrum is less than that of a single transponder in the C or Ku Bands allocated to the Fixed Satel- lite Service (FSS).

AUTHORIZATIONS The problems of obtaining

authorization and licenses present major hurdles to these systems. Inmarsat pioneered the maritime mobile satellite system, and was aided by using its members to obtain authorizations in their home countries. Today, ships with Inmarsat terminals can operate when at sea, but rules vary for their use in ports. Since most ports are now covered by cellular radio, and the calls are cheaper, most ships use cheaper, most ships use their cellular radios when in port.

The land mobile satellite sys- tems present greater problems, since the land mobile vehicle transmitters may need authorization to transmit. Any country with a regional satellite system may insist that their satellite be used rather than a global system. To overcome this, the global systems are seeking local partners who will help obtain authorizations. The transition from a governmental PTT (Postal Telephone & Telegraph) organization to a foreign global

In addition to financial prob-

communications satellite system may prove difficult for many adminis- trations.

CONCLUSIONS The prospect of global communi-

cations via satellite to hand-held, portable terminals has encouraged multiple proposals for mobile sat- ellite systems. The potential rewards of operating such a revolu- tionary communications systems appear so great that many organiza- tions are planning to enter this arena. Most of these proposals are pursuing a myth.

The reality is that there is intense competition for this market from both terrestrial and satellite communications systems. There are also inadequate spectrum and orbi- tal resources, and regulatory hurdles which can render these pro- posals unrealistic. In order to succeed, the mobile satellite oper- ators will need patience, deep pockets, and expertise in politics as well as technology, finance, and marketing.

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TABLE 1

A SUMMARY OF THE MOBILE SATELLITE SYSTEMS

SYSTEM NUMBER OF ORBIT COVERAGE SPACE SEGMENT SATELLITES ALTITUDE COSTS

(KM) ( $ MILLIONS)

I NMARSAT OPTUS SOLIDARIDAD NSTAR AMSC/TMI IRIDIUM GLOBALSTAR ODYSSEY ORBCOMM ARIES ELLIPSO CE L STAR CONSTELLATION TELEDESI C

4 2 2 2 2 66

12 26

24 2

840

48

48

36,000 36,000 36,000 36,000 36,000

780 1,414 10,370

420 1,020 580~7,800 36,000

700

GLOBAL 1,500 AUSTRALIA MEXICO 160 JAPAN N. AMER. 602 GLOBAL 3,400 GLOBAL 1,700 GLOBAL 1,300 GLOBAL GLOBAL GLOBAL 550 GLOBAL GLOBAL 300 GLOBAL 6,500

TABLE 2

COST ESTIMATES OF THE LEADING MSS CONTENDERS

SUPPLIER CIRCUITS LAND STARTUP LIFE COST PER (TH0USANDS)CIRCUITS COSTS (YEARS) CIRCUIT-YR

(THOUSANDS) ($M) ($K)

INMARSAT (21) 2,000 15 I R I DI UM 140 42 3,400 5 16 GLOBALSTAR 65 28 1,700 7.5 8 ODYSSEY 36 3 3 1,300 15 3 AMSC 7 440 15 41 ELL I PSAT 2 356 5 36

TABLE 3

SERVICE COST ESTIMATES OF PROPOSED MSS SYSTEMS

SYSTEM

INMARSAT (21) I RID1 UM GLOBALSTAR ODYSSEY AMSC ELLIPSAT ARIES

COST PER MINUTE ( $ )

2 - 3 3 0.30 0.65 1 - 1.45 0.50 30/MO

SUBSCRIBER TERMINAL COST

( $ )

1,500 200 - 2,000 700 - 1,000 250 - 450 2,000 600 1,500

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