TerreStar Corp. will launch a 7.6-ton satellite with a 60-foot antenna today, making it one of the first companies to offer satellite Internet with speeds comparable to broadband. CNN Money reports:
TerreStar Corp. (TSTR) plans to launch Wednesday the world’s largest commercial satellite, with the goal of providing first-of-its- kind high-speed Internet and wireless voice service from space.
The launch is significant because it could make the case to policymakers, who may have government grants or business to offer, that satellite Internet service is a viable alternative to cable or cellular hookups.
The sheer size of TerreStar’s satellite, which has a 60-foot antenna, will ensure that military personnel, emergency responders, and rural customers are always connected, said TerreStar President Jeff Epstein.
TerreStar has developed a smart phone that operates both on its satellite network and a traditional cellular network. The company has secured a roaming agreement with AT&T Inc. (T), and it could pursue similar agreements with other wireless carriers.
Will TerreStar’s satellite Internet pick up speed? The Motley Fool cites Motorola’s Iridium project as an example of a failed satellite attempt. However, TerreStar-1, the new satellite, might have a chance of being picked up by a bigger telecommunications company:
For mobile-communications wannabe TerreStar to become a monster in the making, it’s going to take a leap of faith by investors that this time satellite telephony will be a hit. Considering the spectacular flameouts by companies such as Motorola (NYSE: MOT)-backed Iridium a decade ago, there seems little to encourage anyone to think things will be different today.
TerreStar is promising to bring the power of a satellite phone to a BlackBerry-sized device, but the initial cost is rumored to be around $700 for the unit. Moreover, its utility will be limited as well, because it will still need to be in direct line of sight with the satellite for communication to proceed. That was one of the main drawbacks to previous sat-phone iterations: You had to essentially get near a window — or sometimes go to the roof of your office building — to make a call. The canyons of a modern city wouldn’t cut it for getting a good connection. However, TerreStar is developing hybrid phones that can use both cellular and satellite technology, switching back and forth as needed.
One big benefit of TerreStar’s mobile communications efforts would be in the sparsely populated areas of the country that have limited or no access to cell-phone reception. And in the wake of another Hurricane Katrina, emergency workers could also benefit from the availability of satellite phones. Further, by limiting its ambitions to providing coverage in North America alone, the company minimizes the risks that plagued Iridium’s global ambitions.
Perhaps the real profit potential here is in TerreStar’s assets: A wireless carrier might find that it just makes more financial sense to buy TerreStar and its spectrum holdings outright than to pay for such access in the marketplace.
Meanwhile, AT&T, which will resell TerreStar service as a satellite-3G hybrid, has a complete nationwide network. Local, state, and governments will comprise most of the market, according to PC World. AT&T will also resell the TerreStar handsets–but not in stores.