December 3, 2001 4:55 PM PST

U.S. ban lifted on Inmarsat

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Once banned from selling wireless phone service in the United States, the sky is no longer the limit for Inmarsat Ventures.

Several U.S. government agencies formed the global satellite phone company decades ago to create and launch satellites, then they sold it off piecemeal to private businesses. Some lawmakers felt these roots gave Inmarsat an unfair competitive advantage, and the company was banned from selling service in the United States under a law passed last year.

But the company announced Monday that it will now sell service in the United States, thanks to a Federal Communications Commission stamp of approval. The FCC is lifting the ban because of Inmarsat's ongoing work to privatize, according to a November statement.

Inmarsat will be using Comsat Mobile, based in Washington, D.C., and Canadian firm Stratos Mobile to sell high-speed wireless Net service mainly to businesses in the United States, according to Perry Melton, Inmarsat vice president for strategic development. Inmarsat sells the phones needed to access its wireless Net service, which is about five to six times faster than Net access over a typical cell phone.

Companies already using Inmarsat's service, such as U.S.-based John Deere Worldwide, couldn't until Monday use the system in the United States. Instead these companies used it for international operations.

Inmarsat's entry into the United States comes at a time when other U.S. satellite phone companies such as Iridium and Globalstar Telecommunications are enjoying a rare stretch of success.

The Sept. 11 attacks have created new interest in satellite phones because many of the cellular networks were left either damaged or so overwhelmed with calls that they crashed.

"It's unfortunate, but the events of Sept. 11 started to make people aware of the need for an alternate network they can use," Melton said.

Satellite phones use orbiting satellites for a network. The calls travel from the phone to the satellite, then to the appropriate person. Cell phones route calls using a series of antennas placed on buildings or light towers.

Though satellite phones rarely experience the dropped calls or lost e-mail that cell phone users complain about, the comparatively bulky handsets and expensive calls--about $6 a minute--had kept many people from choosing satellite service.

This, combined with the high cost of keeping satellites in orbit, had plunged the two major U.S. satellite phone companies into financial trouble. Iridium has just recently emerged from bankruptcy under new ownership and plans to relaunch the service. Globalstar just announced in November it is in the middle of a financial restructuring.

Inmarsat, which has a network of nine satellites, has so far escaped the financial turmoil of its competitors, though until recently it had found a foe in the U.S. government.

The Open-Market Reorganization for the Betterment of Telecommunications Act, passed last year, required Inmarsat to have an initial public offering by Dec. 31 and get FCC approval before it could conduct business in the United States, among other requirements.

The FCC in November said it would allow Inmarsat to do business without an IPO, but only if a Dec. 31, 2001, date were delayed. In the past two weeks, President George Bush extended that deadline one year.

 

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