Satellite mobile phone service on countdown

Following a period of financial uncertainty, ICO Global Communications is back on track and poised to launch the first of its 12 satellites.

ICO Global Communications, the UK company set up in 1995 to develop a global mobile satellite communications system (previously known as Inmarsat P), has been bailed out of bankruptcy by an injection of $550 million.

The US Bankruptcy Court has granted final approval to the deal put together by Mr McCaw and Indian media entrepreneur Subhash Chandra. This ratifies an agreement to provide $225 million in debtor-in-possession financing, as well as $275 million in a second financing round.

Mr McCaw also agreed to commit up to an additional $700 million for exit financing, if this financing is not provided by other investors.

The total investment of £1.2 billion will enable ICO to complete the currently planned construction of its system, and will provide working capital up to the launch of its global mobile satellite services in the second quarter of next year.

Qiaogen Shan, commercial manager, marine at ICO believes that there is a huge potential market for the system. GMDSS equipment is required for vessels over 300gt, but 95 per cent of commercial vessels worldwide are below that size, he says. Owners of these vessels have opposed the introduction of satcoms-based GMDSS equipment because of the heavy cost burden of purchasing and installing Inmarsat A, B, C or M terminals, plus a minimum of two to three weeks of crew training is needed. It also has high user costs, says Mr Shan.

The result is that these small ships are still using VHF and MF/HF for communication. However, because satcoms has taken over almost totally from VHF and MF/HF as the preferred medium worldwide for communications between ocean-going ships and their shore bases, support of the traditional systems will gradually reduce due to lack of traffic. For instance, Portishead Radio in the UK was closed last year, this had traditionally handled MF/HF traffic worldwide.

In addition to a GMDSS system, ships need Inmarsat A, B or M terminals for voice and fax transmission.

With the commercial launch of its service in April 2001, ICO is aiming to bring all the elements of communication together in one unit. They will be cost-saving add-ons for Inmarsat-fitted vessels, or replacements for MF/HF services in medium-sized and small ships, fishing vessels, and yachts, says Mr Shan.

The same terminal can be used for voice, fax, data transmission, as well as safety and distress messaging ? and anyone will be able to operate it, he adds.

ICO hardware is compact, lower cost, can be installed by the crew, needs no training to use, and has much cheaper user costs, Mr Shan explains. On average the cost of equipment and call time will be half that of the current Inmarsat systems, and will bring affordable satcoms to the entire maritime industry, he adds.

From service launch, the system will be able to send data at 4.8 Kbps, higher than competitors? current services, says Mr Shan. The next release of the system will boost this speed to 9.6 Kbps, suitable for most current applications, although the ICO network can support a speed of 38.4 Kbps, he adds.

The system is also dual mode, so that it will use a land-based cellular GSM phone system when within range, and only swop to satcoms when that range is exceeded, this it does automatically.

The ICO equipment for ships will comprise a desk-mounted unit, similar in size and appearance to a normal desk telephone. Because it looks like a normal phone, and is used in the same way, any member of the crew will be able to operate it without special training, says Mr Shan..

Typical cost of the hardware will be around $2,500 – $3,000. Usage charges will be in the region of $1-$1.5/min. Crew social calling will be possible via pre-paid packages such as an individual card, or a SIM card can hold up to ten accounts to accommodate individual crew members.