The world gets noisier

Early next month, the world will become a slightly smaller place. The Iridium network of 66 comsats will be powered up, giving satellite ...

Early next month, the world will become a slightly smaller place. The Iridium network of 66 comsats will be powered up, giving satellite phone owners access to every telephone in the world, from anywhere in the world. So far, similar services have used geostationary satellites placed more than 20,000 miles above the earth. Calls have to be sent up and received through powerful earth stations. So you would be unlikely to get through to someone in Mainpuri, for instance, even if he had a satellite phone.

Iridium, on the other hand, uses satellites in low earth orbit, which can be reached by a handset. Mainpuri will be very much in its area of service.

Iridium may be restricted to telephony, but it represents the first spike in a curve that is set to rise exponentially. For the first time since the global system of long-distance telephony was set up, the world is going to see a fresh binge of satellite-building. And a good number of the new satellite networks will not be about telephony in its traditionalsense.

Three years from now the Globestar system of 56 satellites will be in orbit. Several smaller projects from the US, Europe and Asia will also be ready to go into service. And finally, Teledesic will go online. The joint venture promoted by Bill Gates will operate through a massive network of 288 low-orbit satellites. It is expected to carry the bulk of the traffic of an exploding Internet in the next century.

Teledesic will be quite a watershed. When most companies do not expect to make money using the Internet for years, Gates hopes to make serious money enabling it, one step removed from the actual revenue stream. The point to be noted, however, is that the watershed comes right at the end of the current satellite binge. Voice communications is still where the real money lies Iridium expects to break even within one year of going into service.

There is reason to wonder, however, whether this reality may not change soon. To break even, Iridium is depending upon custom from business travellersand mining executives working in remote areas. They are looking solely at the high end of the market. Networks including the one used by your little tinkler at home do depend on premium users of value-added services like long-distance telephony to cover their operating costs, so that would appear to make sense. However, the vale of a network is judged in terms of its mass distribution capabilities. The lower the number of subscribers, the lower is the value.

But how exactly do you go about increasing your mass distribution muscle when your entire service is premium? No doubt, satphone prices will be driven down by competition but even then, they would be too high for ordinary subscribers to afford. To correct that paradox, the networks might start carrying other traffic. Which, in this day and age, naturally means IP, the language of the Internet. Which means seriously bad news for Bill Gates, whose Teledesic is intended to hog that market. But then, Teledesic may start carrying voice itself, and become avideophone network. The way voice-over-IP technology is advancing, it would be expected, in fact.

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The bad news is that another unpleasant development of the IP networks could bleed into the voice communications market: advertising. It would be entirely sensible for networks like Iridium to try to gain more subscribers through ad subsidisation. So if you have a cheap satellite phone, your dial tone could well be a shameless plug for Maxwell House Coffee. Your busy tone could be sponsored by Nescafe. And your long-distance trill could be replaced by a chant from Coke, the only safe source of caffeine in the world. Satellite phones may make the world smaller. They could also make it lots noisier.