Beyond Iridium: Spaceway, Astrolink want to move into the broadband wireless data market

The satellite industry has been marred by Iridium's and ICO Global's failed attempts to offer voice service. But satellite technology has found another niche in which to compete: wireless broadband data.

Broadband wireless could struggle against other technologies such as DSL and cable technology. However, the next generation satellite systems that Hughes Network Systems' Space-way and Lockheed Martin-backed Astrolink will launch could take a piece of the broad-band pie, giving service providers another way to deliver high-speed Internet access.

Hughes Electronics has about 40 years of experience in satellite technology. But to take advantage of the competitive broadband wireless data market, its subsidiary, Hughes Network Systems, formed Spaceway. The Spaceway system will rely on multiple spot beams to transmit and receive on-demand video, audio, multimedia and other digital data. The company expects uplink rates to reach from 10 kb/s to 6 Mb/s, and downlink rates will be hundreds of times faster than those delivered by phone lines.

With Hughes behind it, Spaceway will have access to the company's existing base of large enterprise users and residential DirectPC customers.

"This is not a start-up but an extension of what Hughes has done and is now doing to evolve its products into next generation products via Spaceway," said Edward Fitzpatrick, vice president of business development for Spaceway.

"[Satellite technology] will have an impact on users because terrestrial broadband never will be available everywhere, and satellite will be available everywhere," he added.

A little more than a year ago, Lockheed Martin had a similar idea. It initiated a broadband wireless venture called Astrolink. Like Spaceway, the wireless broadband service provider would focus on the broadband data space and would deliver Internet and intranet access and multimedia, as well as support corporate data networks. Astrolink intends to offer service by 2003.

"Satellites will have a large role to play in the Internet access arena," said Tor Soevik, director of market distribution for Astrolink. Though the satellite industry has had to contend with the stigma from the Iridium and ICO Global breakdowns, next gen providers Spaceway and Astrolink have remained unscathed.

"Iridium and ICO have hurt the satellite industry on a broad level, but we have been immune," Fitzpatrick said.

Unlike those that struggled before them, Astrolink and Spaceway are positioned to offer high-speed data access rather than plain voice service. Both companies' systems rely on geostationary-earth orbiting (GEO) satellites - not the low-earth orbiting (LEO) ones deployed by Iridium and ICO Global.

One GEO satellite can cover the entire North American continent, whereas multiple LEOs would be required to do the same job, Fitzpatrick said.

Though the next gen providers will enter the satellite broadband space around the same time, Spaceway could be the stronger of the two because it can tap into Hughes satellite technology experience, said Greg Caressi, a research manager of the satellite communications group at Frost & Sullivan. "Astrolink might have a tougher time because for Lockheed Martin, [satellite] is a different game."

Caressi anticipates both companies will have success in targeting the enterprise mar-ket and rural areas. However, satellite will have the hardest time in areas where it competes with DSL and cable, he added.

Spaceway and Astrolink might compete with other broadband technologies, but each will have its advantages, Soevik said. "Broad-band terrestrial wireless has a bright future, regardless of what satellite does, although it is a big enough market for all."

Fitzpatrick agrees."No one technology will dominate; satellite will be one of the healthy vehicles for delivering broadband access."

Spaceway and Astrolink could team with ISPs to provide them with additional capacity, or work with local carriers to extend the reach of their networks. Because both companies have yet to launch, they are unsure how the service provider relationships ultimately will pan out.

Service providers will want to put a satellite offering in their bag of services, Caressi predicted. "It will be a piece of the pie because there is room for it. Now it is a matter of how many systems can be supported by the market."