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TheStreet Open House

Space: The Final Frontier For Cell Phones?

PETER SVENSSON

LAS VEGAS (AP) ¿ The vast, thinly populated expanses of the country that still lack cell phone coverage could be getting an interesting option next year: ordinary-looking cell phones that connect to a satellite when there's no cell tower around.

In June, a rocket is scheduled to lift the largest commercial satellite yet into space. In orbit 22,000 miles above the Earth, the satellite will unfurl an umbrella of gold mesh 60 feet across and aim it at the U.S. That gigantic antenna will let the satellite pick up signals from phones that are not much larger than regular cell phones.

That satellite, from TerreStar Corp., is due to be followed by two similar, even larger ones from SkyTerra Communications Inc. next year. SkyTerra puts the cost of its satellites at $1.2 billion.

On the face of it, these are bold moves, especially considering that the satellite phone business has been troubled. Most famously, two companies with grand projects for worldwide satellite phone coverage, Iridium and Globalstar, filed for bankruptcy at the beginning of the decade, wiping out billions in investor capital.

But the background to the new launches is more complicated, and analysts say the business models of TerreStar and SkyTerra ultimately might rely more on the companies becoming acquisition targets for conventional wireless carriers.

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