ViaSat-1 has already won numerous praise as satellite marvel, boasting a total capacity of 140 Gbps, which it uses to provide its Exede broadband service in remote and rural areas in the U.S. as well as to supply internet connectivity to JetBlue airplanes. The new satellite, aptly named ViaSat-2, is expected to double ViaSat-1’s capacity and greatly expand the provider’s coverage in the U.S., Canada, the Caribbean and Central America (ViaSat-1’s beams today skip over large parts of the Rocky Mountains and Western Great Plains).

The satellite hasn’t been without controversy, though, as ViaSat is switching out suppliers. Space Systems/Loral built ViaSat-1, but the two became embroiled in litigation after ViaSat accused the aerospace company of absconding with its intellectual property when it built a competing satellite for Hughes Network Systems.

That satellite became EchoStar 17, doesn’t have quite the capacity of ViaSat-1, but Hughes is using it to go head to head with ViaSat in the rural broadband market. Its Gen4 service offers speeds of 10-15 Mbps to customers, while ViaSat’s Exede service clocks in at about 12 Mbps.

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HughesNet has named the new service Gen4 and the satellite utilizes EchoStar-Hughes’ new Jupiter high-throughput technology, which expands the total capacity of the satellite to 100 Gbps. That has allowed Hughes to distribute that capacity more liberally to its customers, bumping up download speeds from 1-2 Mbps to 10-15 Mbps and upload speeds above a megabit. ViaSat launched a similarly brawny satellite last year, and began offering a $50/month 12 Mbps service in January.

Hughes service plans are comparably priced with cable broadband, ranging from $50 to $100 a month, but the satellite’s finite capacity does give the service some stiff limitations. Unlike its previous plans, these newer, faster tiers come with caps. At the low end customers are limited to 20 GB, while the upper tier taps out at 40 GB. By comparison cable operator Comcast recently raised its monthly cap from 250 GB to 300 GB a month.

What’s more, customers are restricted when they can consume that data -– on all plans, half of the monthly data bucket can only be tapped between 2 AM and 8 AM. But Hughes also seems to have done away with the old daily throttling policies that irked so many of its customers.

Before Gen4, customers technically didn’t have to deal with caps, but they were limited to daily download allotment from 250 MBs to 450 MBs. If they exceeded those caps in a 24-hour period, their connections were throttled back to dial-up speeds, returning to normal after another 24 hours. It’s not clear if Hughes is eliminating those fair-use policies completely, but it looks like customers are getting much more flexibility in how they consume their admittedly limited monthly data allocations.

Though it’s still not on par with its wireline counterparts, satellite broadband has made leaps in last year as a new generation of equipment has gone into orbit. That’s led to several new services that have bumped up the speeds available to a large swathe of the American hinterland and other underserved areas where DSL and cable aren’t options. In addition to ViaSat’s Exede and HughesNet’s Gen4, Dish Network has bought capacity from both companies, allowing it to sell a broadband service called DishNet in areas ViaSat and Hughes’ respective birds don’t cover.

Improved satellite technologies have also expanded broadband access beyond rural homes and business. ViaSat’s satellite will power JetBlue’s forthcoming in-flight Wi-Fi service, significantly boosting the speeds available to passengers while drastically lowering the cost of delivering that data. In three years, Iridium will begin launching a new constellation of 66 satellites into low-Earth orbit, which will be able to supply 8 Mbps connections not just to homes in the Midwest farmlands but to any point on the globe.

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On June 4, 2010, Matt Desch, CEO of satellite communications company Iridium, sat in his McLean, Va., office staring into a computer screen at a live video feed of a 368-ton rocket idling on a launch pad in Cape Canaveral, Fla. The telecom veteran had staked Iridium’s future on a $3 billion plan to bring the company’s aging constellation of satellites into the 21st century. A key part of that plan was getting 72 next-generation satellites into orbit, and it was this rocket, now preparing for its maiden flight, that would eventually carry Iridium’s precious cargo into space.

In selecting a company to launch his satellites, Desch hadn’t opted for a tried-and-true aerospace player like Arianespace or International Launch Services. Instead, he had decided to go with the upstart Space Exploration Technologies, better known as SpaceX. Why? SpaceX had offered to launch the six-dozen satellites for half what the established players were charging, saving Iridium half-a-billion dollars.

Matt Desch

But the decision carried a huge amount of risk. While SpaceX’s entrepreneur-founder Elon Musk was already well known for his ambitious goal of privatizing space travel, his company at the time had had more failures than successes. Its previous-model rocket, the Falcon 1,misfired on each of its first three launches: the first caught fire, the engine on the second died, and on its third launch, the rocket’s two stages collided. Those failures sent the company teetering toward toward death, saved only by the Falcon 1′s fourth, successful, launch.

Now, Desch and Iridium were about to see whether SpaceX’s newest rocket, the Falcon 9, was more reliable than its predecessor — and the months leading up to June 4 hadn’t been very reassuring. The rocket was supposed to have embarked on its first flight in November of the previous year, but that launch had been postponed 10 separate times.

The rocket had finally reached the pad, but as Desch watched from his office, there had already been one false start, the launch aborted due to an errant sensor reading. If SpaceX couldn’t light the fuse by 3 PM, the mission would have to be rescheduled once again.

Another string of failures could endanger Iridium’s exacting launch schedule, or worse, send SpaceX spiraling into bankruptcy and Iridium scrambling to find another launch provider. The biggest concern, though, was the reaction of Iridiums’s bankers. Desch had negotiated a $492 millon contract with SpaceX — the largest commercial launch contract in history – but because of SpaceX’s track record, the consortium of European banks underwriting the whole project wanted to see a successful launch of the Falcon 9 before they put pen to paper.

As Desch put it: “Bankers don’t like to see explosions.”

Fifteen minutes before the launch window closed, the Falcon 9′s first-stage engines ignited and the rocket lifted off. Six minutes later it achieved its target altitude and placed a dummy capsule in orbit 155 miles above the Earth. The normally stoic Desch let out a cheer of elation. Outside his office his employees celebrated — high fives all around.

A week later, Desch was in Paris hamming it up with the bankers, and true to their word, the financiers signed off on the contract. When Musk attended Iridium’s investor conference in New Orleans later that year he was treated like a superhero — it was like “having Tony Stark, a real-life Iron Man” in the room, Desch said.

Elon Musk

The following is the never-before-told story of how Iridium placed a huge bet on SpaceX that wound up paying off. In a series of interviews, Desch shared with GigaOM the details about how a satellite communications company struggling with its future found common cause with a scrappy startup that wanted to broaden the frontiers of space exploration.

Iridium didn’t need SpaceX to survive, but by placing its faith its Elon Musk’s company it found a way to overhaul one of the largest satellite constellations in the heavens on a shoestring budget — and trade up its old voice-centric business model for one focused on data. In exchange, SpaceX got the major contract it needed to firmly establish itself as a powerhouse in commercial space flight.

A mobile network hurtling through space at 17,000 mph

Iridium was born out of the satellite communications boom of the late 1990s, riding a wave of speculation that satellite players like itself, Globalstar and Orbcomm could build a truly global mobile network for the monied classes. Backed heavily by Motorola, it activated its constellation in November 1999 and began selling its first bulky satellite phones around the world. Nine months later it filed for bankruptcy,

At that point it was clear that satellite telephony wasn’t going to even compete with cellular, much less replace it. There was a good chance that Iridium’s $5 billion to $6 billion network would have been decommissioned entirely, letting the satellites fall out of orbit and burn up in the Earth’s atmosphere, creating one of the most spectacular pyrotechnics display the world has every seen. But at the last minute, a consortium of investors bought Iridium’s extraterrestrial assets for pennies on the dollar and restarted satellite phone service in 2001 with much more modest ambitions.

Iridium isn’t your typical satellite communications company. It’s not tossing a few satellites into orbit that are hovering at fixed points above specific continents. Instead, it operates a constellation of 66 birds that cover the entirety of the Earth’s surface from pole to pole. Each satellite travels at an orbital velocity of 17,000 mph on dispersed planes that intersect on the Earth’s axis, meaning no matter where you’re standing – or floating — on the surface of the earth, you’re in view of multiple Iridium satellites.

That kind of network may not be useful to your typical consumer or business user, but it’s extremely attractive to a certain set of professionals – military, international contractors, merchant marines, field scientists and surveyors – that travel to the far corners of the globe.

When Desch took over as CEO in 2006, Iridium had cemented a close relationship with the U.S. Department of Defense, and was expanding into the private sector. He took the company public, made it a profitable venture, and expanded the company’s portfolio to include data and machine-to-machine services communications (for companies or organizations that want to keep track of their assets even when they are in the middle of the ocean or in the remotest jungle). Desch has doubled Iridium’s subscribers to 576,000 in six years, according to the company’s last earnings report.

Iridium has some big accounts like FedEx and UPS but many of its customers are smaller outfits. Iridium satellites track dog sleds as they race across Alaska in the Iditarod, and they provide crucial communications for the relief workers of the International Federation of the Red Cross and Red Crescent Societies in war-torn and diaster-stricken regions of the world.

Desch said Iridium no longer has any interest in challenging the mobile carrier powers or moving beyond basic voice and data connectivity. “I hate to use the term dumb pipe,” he said. “It has such negative connotations. But I have no problem with the term because no one can supply the kind of dumb pipe we can.”

A fascination with anything that flies 

Desch started his career at Bell Labs 30 years ago, and since then he’s made the rounds through the telecom industry. He was president of the now defunct Nortel Networks’ wireless division, where he oversaw the construction of some of the  world’s biggest 2G networks. In 2002, he was tapped to become CEO of Telcordia, the former research arm of the regional Bell phone companies. He sits on President Obama’s National Security Telecommunications Advisory Committee and has either chaired or sat on the boards of pretty much every U.S. telecom industry trade and standards organization.

An Iridium Flare over upstate New York

Desch grew up during the Apollo Moon flights, and has always been fascinated by anything that flies. Though he’s never left the troposphere, he pilots his single-engine Cessna T210 several times a month. When discussing Iridium, Desch never fails to mention that the satellite constellation has become an object of obsession among star gazers. All of Iridium’s satellites have flat, door-sized, highly-reflective antennas. When those antennas catch the sun’s rays just right they produce a “flare” 3o times brighter than Venus in the night sky.

When Desch accepted his new role at Iridium, he was almost immediately handed a huge task: to replace Iridium’s aging constellation with a new generations of satellites. It’s current network is already well past its anticipated operational lifespan of seven to 10 years, and several satellites have already malfunctioned or have tumbled back into the atmosphere. Iridium 33 was decommissioned in a more dramatic fashion in 2009 when it collided over Siberia with a defunct Russian communications satellite at 22,000 mph.

Iridium replaced those defunct or lost satellites with in-orbit spares, and Desch said that the company could keep the current fleet going until 2017 when it hopes to complete its replacement. But there is definitely a sense of urgency. Iridium may be able to squeeze some more operational life out of its satellites, but it doesn’t change the fact they’re already obsolete.

In the last 10 years, mobile communications has shifted its focus from voice to mobile broadband. Satellite broadband technology has made huge leaps. ViaSat in October put into orbit a satellite with a total network capacity of 140 Gbps, allowing it to offer speeds up to 12 Mbps to customers on the ground. Iridium’s closest competitor Globalstar, which runs a constellation of 40 satellites, is already one-third of the way through its next-generation satellite deployment. Globalstar’s orbiters only support speeds of 256 kbps, but even those sub-broadband connections put Iridium at a significant disadvantage.

Iridium’s network can only support a 10 kbps earth-to-orbit connection, which is pretty much the speed of a 1990 dial-up modem. That might be fine for downloading email without attachments from an ocean-bound oil tanker or sending out the GPS coordinates of a polar expedition. But in an age of multi-megabit connections to smartphones, those speeds just don’t cut it.

Desch’s big bet

Between 2015 and 2017, Iridium plans to replace every single one of its 66 current satellites with new Thales Alenia-built orbiters, and also throw up six spares. Called Iridium Next, the constellation will boast device connection of speeds of well over 1 Mbps to mobile devices and 8 Mbps to dish antennas, and will significantly boost the capacity of the overall satellite grid. When the constellation is complete, Desch said, Iridium will be the only communications company in the world that can deliver a megabit or more of a bandwidth to any point on the globe.

To get such a huge payload into low-Earth orbit, Desch didn’t just need a launch provider to supply multiple rockets, he needed one that could reliably send those rockets into space every few months starting in 2015. Once Iridium puts its first batch of satellites into orbit, the others need to go up in rapid succession.

Iridium’s satellites aren’t just bouncing signals back down to the Earth’s surface. They’re inter-networked. They’re passing calls among one another in a cosmic game of hot potato until one of those satellites flies over one of four ground stations where it finally connects the call to the terrestrial network.

Having a 1 Mbps connection to a new satellite does little good if the satellite completing the chain can only support dial-up speeds. So Iridium Next won’t be open for business until the full complement of 66 new satellites is in orbit.

Finally, Iridium had to buy those launches on the cheap, according to mobile satellite services analyst Tim Farrar. The original Iridium constellation in 1999 was a multi-billion-dollar debacle. So Iridium is determined to get its next-generation network up on a $3 billion budget, Farrar said.

“Iridium really had to go with SpaceX, because more established players have found their launch services in heavy demand in recent years and so have been raising prices,” Farrar said.

For $492 million, SpaceX would deliver eight launches, while any other rocket supplier would have charged $1 billion for the same services, Desch said. But Iridium also hedged its bets. It contracted with ISC Kosmotras – a launch consortium between Russia, the Ukraine and Kazakhstan — to serve as a second launch provider and as a backup in case SpaceX is delayed.

Still, it wasn’t an easy decision, Desch said. Iridium first started negotiating with SpaceX in 2006, when its rockets started falling out of the sky. It wouldn’t matter how much of a deal SpaceX cut if it couldn’t deliver a reliable launch vehicle or ceased operations.

“Our view was always that SpaceX was going to be successful,” Desch said. “What we weren’t sure about was when they would be successful.” Iridium had some leeway since its first launch wasn’t scheduled until 2015, but it couldn’t push its launch date out much further. At that point Iridium’s old orbiters would be 15 years old, long past their original expiration dates. It needed to get the new birds up but before the old ones start failing en masse.

Iridium is by no means Space X’s most important customer — that would be NASA. Nor is Iridium SpaceX’s first commercial satellite customer. But the size and scope of the Iridium deal were key to establishing the fledgling aerospace company as a heavyweight in the commercial launch industry, said SpaceX President Gwynne Shotwell, who led negotiations with the satellite operator.

Gwynne Shotwell

“We definitely knew the significance of that deal,” Shotwell said. “It was the largest commercial launch contract at the time. No one else has ordered six or seven launches. … It’s helped us out in every deal we’ve gotten since.”

Houston, do we have a problem?

Earlier this month, Iridium revealed in its second-quarter earnings call that it was canceling its first Falcon 9 launch, and had decided to go with backup ICS Kosmotras for its first flight. Desch said there were no problems or delays; rather Iridium was just minimizing costs. By packing 10, rather than nine, satellites onto each SpaceX rocket, Iridium says it can reduce the number of launches from eight to seven, saving an estimated $15 million. But Desch added that Iridium also wanted to buy SpaceX more time.

“It’s a smarter strategy for in-orbit testing and provides us some additional cost savings,” Desch said. “It also gives SpaceX a little more time to get through the two dozen or so launches that are on their manifest before Iridium Next.”

Ironically, the greatest risk to Iridium now isn’t the possibility of SpaceX’s failure, but the possibility that SpaceX becomes too successful, according to satellite communications analyst Farrar.

“Their risk has always been that SpaceX gets a lot of money from NASA and so will likely put them first,” Farrar said. “That’s also the exciting, novel stuff like manned spaceflight, so people naturally gravitate towards it. Launching commercial satellites is a less exciting business requiring a lot of repetitive, careful engineering.”

Dragon Spacecraft

SpaceX has been on quite the roll lately. It hasn’t suffered a single failure in its three Falcon 9 launches, the last of which delivered the company’s Dragon spacecraft to the International Space Station on a resupply mission. Earlier this month, SpaceX won the ultimate prize: a $440 million contract from NASA to design a manned spacecraft to shuttle its now-grounded astronauts into orbit.

When asked if SpaceX’s recent success jeopardized Iridium’s tight launch schedule, Desch laughed. He admitted that he freaks out a little when Musk goes off on one of his soliloquies about exploring other planets or talks up new rockets like SpaceX’s Falcon Heavy designed to propel astronauts on their extraplanetary adventures. Desch just needs to get to low-Earth orbit, not Mars.

But Desch said Iridium has SpaceX’s full attention. Iridium Next is still SpaceX’s single largest commercial contract — it’s not going to get pushed to the wayside no matter how many sexier missions the company lands. Desch has been working with Musk and Shotwell for nearly six years, sticking with the company through its lowest points. He believes that SpaceX will remember its early friends. As he told analysts at Iridium’s earning call: “We knew them when they weren’t quite as cool.”

Iridium flare photo courtesy of Flickr user Gadget_Guru

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AT&T is petitioning the Federal Communications Commission to impose network buildout conditions on Dish’s satellite spectrum –- requirements that would be passed onto AT&T if it acquired the satellite TV provider. Meanwhile, Dish insists it plans to use that spectrum to build a commercial LTE network to challenge the reigning nationwide mobile operators, including AT&T. These are hardly the actions of two companies about to tie the knot.

What we’re witnessing here is some very cynical pre-nuptial gamesmanship. According to TMF Associates satellite communications analyst Tim Farrar, Dish is playing AT&T off its competitors by threatening to partner with MetroPCS to build a nationwide LTE network over its satellite broadband and 700 MHz spectrum. To muck up Dish’s plans, AT&T is insisting to the FCC that the satellite TV provider face the same strict rollout requirements the commission imposed on fellow satellite spectrum holder LightSquared: An LTE rollout covering 100 million people in 33 months and 260 million in less than 6 years.

As Farrar wrote in his blog:

This submission is a blatant attempt by AT&T to put a thumb on the scales, as the FCC weighs up the appropriate balance between buildout mandates and clawback of any windfall. The reason for AT&T’s action at this very late stage in the process appears to be that DISH is trying to play off AT&T’s prospective bid against a potential venture with MetroPCS. MetroPCS would certainly be unwilling to commit to a 260M POP buildout, so if the FCC conceded AT&T’s demands, they would be the only game in town and DISH would lose its leverage in price negotiations. We’ll find out soon enough if AT&T’s gambit succeeds, but few would bet against [Dish chairman] Charlie Ergen’s poker playing skills after the events of the last year.

AT&T may seem like the bad guy here, but Dish’s motives are just as suspect. In an FCC filling Thursday, Dish maintained it plans become a competing mobile operator, launching an LTE network that would compete with the big 4:

The overly aggressive and unrealistic schedule AT&T advocates would likely set DISH up for failure or force DISH into unfavorable business arrangements with large Commercial Mobile Radio Service (“CMRS”) carriers.  It would erect artificial barriers to DISH’s plan to construct a new mobile broadband network on its own or consideration of partnerships with smaller companies, and could threaten DISH’s ability to roll out a retail service.  In short, an impracticably tight schedule would be a triple loss for consumers, the Commission, and DISH.

But as my colleague Stacey Higginbotham wrote when Dish first applied for permission to build LTE, Dish’s proposal sounds more like a financial gamble to cash in on the skyrocketing value of mobile broadband spectrum, rather than a legitimate bid to become a wireless competitor. One big clue is Dish’s insistence on deploying an LTE-Advanced network in order to “enter the market for the first time with the most advanced technology.” Of course, LTE-Advanced was just finalized as a standard so Dish claims it will have to wait several years before commercial equipment is available.

That’s absolute malarkey. LTE-Advanced is an iteration of LTE technology, not a completely new network. Claiming that you must wait until LTE-Advanced equipment is available before building a network is kind of like insisting you can’t move into a house before the shag carpeting is installed. There’s nothing stopping Dish from building an LTE network this year and evolving it into an LTE-Advanced network in 2013 or 2014.

Supposedly we face a spectrum crisis, but no one is acting like it. Instead of using public airwaves to deploy real networks, operators seem to be playing high-stakes poker with their licenses. AT&T’s motives may be self-serving, but maybe in this case it’s right. If it forces strict rollout guidelines on Dish’s spectrum and then buys those licenses, we may actually get a new mobile broadband network – rather than a bunch of operators whining about how they don’t have the spectrum to build them.

Poker Image courtesy of Flickr user Ross Elliott
Tower Image courtesy of Flickr user Nikhil Verma

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LightSquared’s value is tied up in its 1.6 GHz satellite spectrum, a 50-MHz-plus block of satellite frequencies it is fighting desperately to repurpose for LTE. If it gets approval from the Federal Communications Commission to launch, that spectrum would be worth billions. Those airwaves would form the foundation of a nationwide LTE network providing heaps of wholesale capacity that LightSquared could sell to other carriers and any other company that wanted to get into the 4G business.

If LightSquared doesn’t get the go-ahead for LTE, though, its licenses wouldn’t become worthless, but it’s value would be greatly reduced. It would only be able to use that spectrum for satellite broadband, which simply can’t deliver the speeds or scale to the volumes of subscribers that an LTE network could. It’s becoming much more likely that a satellite-only future is in LightSquared’s cards.

The government agency overseeing the GPS satellite network is recommending that LightSquared’s plans be stopped, joining the now resounding chorus of government and industry voices that claim LightSquared’s network would cause chaos for millions of GPS receivers, which all depend on the location and timing signals in a nearby band. With that kind of opposition – plus new provisions instituted by Congress that would block LightSquared if any interference concerns remain – the chances of an FCC green light are slim, if not non-existent.

LightSquared is fighting back and has even begun accusing GPS device maker Garmin and Trimble of using their influence with government GPS authorities to rig the evidence against the carrier. Ultimately LightSquared wants more testing, but that testing will take time that the would-be carrier doesn’t have. LightSquared said Wednesday that has enough cash to keep going for several quarters, but after that it’s in trouble. Given the cloud over its network plans, no one would be willing to invest more money in the company.

A lot of options, but few of them good

If LightSquared is forced into bankruptcy or decides to negotiate with its bondholders outside of the courts, that could mean a transfer of control from principle investor Harbinger Capital Partners, run by Philip Falconer, to its debt-holders. If Icahn gains control of the company he will have some interesting choices to make.

Icahn could continue Falcone’s fight against the GPS industry, but that looks to be a losing battle. He could decide to run LightSquared solely as a satellite network, though the money to be made there might not justify the trouble. He could try to sell LightSquared’s L-band licenses, but without a waiver to build LTE he wouldn’t get much money and may not even find bidders. In other words, Icahn might get the company on the cheap, but he wouldn’t be left with much of a business to either revive or dismantle.

How patient is Carl Icahn?

There is one additional option, though, if Icahn has the patience for it. He could sit down with the GPS industry and government agencies to develop a long-term plan to make the L-band palatable for LTE.

LightSquared is right about one thing: The GPS device makers have designed their receivers in such a way that they reach outside of the GPS bands and into LightSquared’s spectrum. That wasn’t a problem when the only thing in those frequencies were low-powered satellite waves. But a high-powered LTE network would overpower those sensitive GPS devices.

Even if LightSquared is in the right, the FCC still can’t just simply give LightSquared the go-ahead when the whole GPS system is at risk. But the government also has every interest in repurposing as much spectrum for mobile broadband as possible. That would mean requiring GPS receiver makers like Garmin and Trimble to put filters in their new devices and develop a plan to either replace or retrofit older devices in the field.

Commercial GPS device makers haven’t shown any willingness to even consider such a plan, but they might be more agreeable if given some breathing room. LightSquared is trying to barrel out its LTE network in a matter of months, while such a large scale replacement program would take years, if not the better part of decade. The question is whether Icahn or any investor would be willing to wait that long before seeing a return.

Indecision image courtesy of Flickr user, san_drino
Thinker image courtesy of Flickr user Mike Disharoon

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O3b Networks launched with much fanfare in 2008 and in 2010 raised a whopping $1.18 billion from a wide assortment of investors, including Google. The company was put under pressure by the global credit squeeze, and that pushed out its plans and limited its scope. When O3b launched in 2008, I wrote:

The project, the brainchild of Greg Wyler, is going to cost $650 million and will require 16 satellites; the service is due to start by the second half of 2010. Wyler apparently has a lot of telecom experience in Africa. Liberty Global, a company owned, in part, by legendary media mogul John Malone is going to help develop the project.

Since then the company has reduced the number of satellites to eight. The company is planning to sell its high-speed connectivity to Internet service providers, especially in countries and locations that are not connected via fiber. These include many small islands in the Pacific, a key target market for O3b, Collar told attendees of PTC 2012. The company, according to Collar, will offer what it calls O3b Trunk service, which will provide connections from 100 Mbps to 1.2 Gbps with 130 millisecond round-trip latency.

The company recently announced that it will work with companies such as Gilat Satellite and ViaSat to provide equipment for carriers to receive data from O3b. The KA-band satellites orbit at 8,000 km, four times closer than regular geostationary satellites, and that gives them the capability to provide better performance and extremely low latency.

P.S. Where is founder Greg Wyler? He doesn’t even seem to be on the board of directors of the company or on the management page. Did he leave the company? Any clues, anyone?

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One thing is clear: O3b Networks will need a lot more than $60 million. The project, the brainchild of Greg Wyler, is going to cost $650 million and will require 16 satellites; the service is due to start by the second half of 2010. Wyler apparently has a lot of telecom experience in Africa. Liberty Global, a company owned, in part, by legendary media mogul John Malone is going to help develop the project.

Given how many of the previous attempts have been non-starters — whether for economic reasons or simple technology constraints — the claims by this company are quite audacious. Here are some facts about their service:

* The service is strictly wholesale and will sell bandwidth to local ISPs, fixed-line and mobile providers for, say, cellular and WiMAX backhaul.
* The company is also going to offer Google Apps to its potential customers.
* They claim speeds of up to 10 Gbps and low latency. They can do that for three reasons:
* They have a dedicated Ka-band satellite and as a result, the large available Ka-band spectrum can help deliver bandwidth at speeds of Gigabit/second and higher.
* O3b Networks uses parabolic antennas, which reduce latency.
* Their birds — 16 of them — are going to be positioned at 8,063 kms from the Earth, which allows them to add new satellites.
* The coverage zone is between +/- 40 degrees of latitude.

I’m intrigued by this startup because it does make sense to offer connectivity in remote areas. It also makes sense because Africa is one of the booming cellular markets and one where there is a need for cellular backhaul infrastructure. In remote areas, voice is going to be the killer app for a long, long time. The problem is that this company will always compete with fiber networks in terms of pricing, and that might put them on the back foot.

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