Reviving Iridium

About Satellite Telephones Contd...

Here, MSS came to the rescue of those customers who required a telephone service that could be used anywhere in the world. The market for MSS has increased steadily in the last couple of years. With MSS, customers did not have to take different connections at different locations and change their handsets from country to country. According to a study,⁹ the number of MSS subscribers was projected to increase from 0.5 million in 1999 to 8 million by the end of 2002.

Also, the revenues from the business were expected to increase from $4 billion in 1999 to $19 billion by the end of 2002. Subscriber base for other services like data and paging was also expected to increase and their revenues were expected to reach around $2 billion by 2002 from $250 million in 1999.

Many players including Globalstar, Odyssey, and Inmarsat-P/ICO entered the MSS market seeing the strong growth potential (Refer Exhibit I). These companies employed different technologies like LEO, MEO and GeoSynchronous satellites to deliver MSS services to customers. The Iridium system used a constellation of 66 LEOs (See Exhibit II for a detailed description of the working of Iridium's satellite system).

However, the success of satellite telephone systems was dependent on a host of factors such as:

• Competition from other forms of service.
• Customer demand.
• Cost and financing.
• The ability of companies to capture different segments of the market.
• Access to critical foreign markets.
• The success of these innovative new technologies in the long run.

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9] Leslie A Tailor of Leslie Tailor Associates conducted a study on Market Demand for Mobile Satellite Services, Satellite
Statistics in 1999.

Case Details

Case Code : BSTR031
Themes: Turnaround Strategy
Case Length : 11 Pages
Period : 1999-2001
Organization : Iridium LLC
Pub Date : 2002
Teaching Note : Available
Countries : USA
Industry : Telecommunication

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