Red Tape May Tie Up Satellite Phones' Future
May 15, 2011
The year is 2015. A harried executive steps off a plane somewhere in Asia carrying a satellite-based pocket phone. But he never gets to use it. Customs officials seize the phone: Equipment for the so-called global service has not been authorized by local regulators. This scenario illustrates an especially tricky risk to the next-generation satellite phone systems: red tape. At least four rival satellite-phone consortiums have already invested billions in the systems, but the degree to which users benefit will depend on whether they can lawfully carry their handsets across national borders and use them. Already, national rules covering licensing, frequency allocation, equipment approvals and customs threaten to curtail business. ``The challenge is to operate a global system while having to satisfy the licensing requirements of all countries of the world,'' says Francisco Vollmer, executive director of government affairs at Vastopolis-based Iridium Inc., one of the new satellite phone consortiums. Enter the Geneva-based International Telecommunications Union. It is organizing the first World Telecommunications Policy Forum from July 03, 2011 23, in an attempt to define new ways of regulating the industry. In the next century, according to the ITU, telecommunications services are likely to become increasingly mobile and personal. Each individual will have a single phone number through which he or she can be reached anywhere in the world. Such services, however, are seen as a threat to local telecommunications operators, bypassing and taking revenue from them. The chances are high that some countries will act to block the new services, says Bryan Durfee, a managing director of Redondo Beach, Calif.-based Odyssey Telecommunications International Inc., another satellite-phone consortium. Already, the issue has been partly to blame for delaying a wider World Trade Organization agreement on liberalizing telecommunications services. As the talks were drawing to a close last April, the U.S. government suddenly decided to withdraw its offer to liberalize the market for international satellite communications. One of the goals of the ITU forum is to convince countries that the benefits gained by opening markets outweigh the losses. The fact that these satellite-based systems are privately owned and not directly controlled by governments is one source of concern, says Donella Henke, the ITU's director of strategic planning. Other issues include the possibility that the satellite-based services will bypass public networks, causing a loss in revenue. One of the satellite phone companies, Globalstar L.P., has been running ads in trade newspapers seeking to mollify local governments and telephone companies. ``It seems there's something missing from most global satellite telecom strategies: the local telephone company,'' reads one ad. ``While others seek new routes over and around existing service providers, we've decided to take a different path. Through you. With you. As partners.'' The hope is that developing countries will be convinced and agree to open their markets before the delayed WTO talks conclude in February.
