Managing Information Technology

Chapter 3 • Telecommunications and Networking 69

more transponders that listen to a particular portion of the
electromagnetic spectrum, amplify the incoming signals,
and retransmit back to earth. A modern satellite might have
around 40 transponders, each of which can handle an
80-mbps data transmission, 1,250 digital voice channels of
64 kbps each, or other combinations of data channels and
voice channels. Transmission via satellite is still line-
of-sight transmission, so a communication would have to
be relayed through several satellites to go halfway around
the world (see Figure 3.3).
One interesting, but annoying, aspect of satellite
transmission is the substantial delay in receiving the signal
because of the large distances involved in transmitting up
to the satellite and then back down to earth. This is
particularly true for the geostationary earth orbit (GEO)
satellites, which are positioned 22,000 miles above the
equator such that they appear stationary relative to the
earth’s surface. The minimum delay for GEO satellites is
just under one-third of a second, which is an order of
magnitude larger than on fiber-optic connections or earth-
bound microwave covering the same ground distance.
In the 1990s, a great deal of interest arose in low
earth orbit (LEO) satellites, orbiting at a distance of only
400 to 1,000 miles above the earth—compared to 22,000
miles above the earth for GEO satellites. Because of their
rapid motion, it takes a large number of LEO satellites
for a complete system; on the other hand, because the

satellites are close to the earth, the ground stations need

less power for communication and the round-trip delay is

greatly reduced. Fifteen years ago it appeared as though

nearly 1,700 LEO satellites would be launched by 2006—

more than ten times the 150 commercial satellites in orbit

at that time (Schine et al., 1997)—but that did not happen.

Let’s see why.

The first major LEO project was Iridium, which

launched 66 satellites to offer mobile telephony, paging, and

data communication services. Investors in the $5 billion

Iridium project included Motorola, Lockheed Martin, and

Sprint; Motorola managed the project. The satellites were all

flying, and the Iridium system went live in 1998, with

two-page advertisements splashed in major magazines such

asBusinessWeek.The Iridium customer would have an

individual telephone number that would go with him or her

anywhere on earth, enabling the customer to make and

receive calls from even the most remote places on the globe.

Unfortunately, the prices to use the Iridium service

were too high, and it never caught on. Iridium filed for

bankruptcy in 1999, and for a time it appeared likely that

the satellites would be allowed to fall out of orbit. But

Iridium got a second chance! A group of investors paid

$25 million for the satellites and other assets of the original

Iridium (quite a bargain!) and started satellite telephone

service again in 2001 (Jarman, 2009). The old Iridium

needed 1 million customers to break even; the new Iridium

needed only tens of thousands. Many of these customers

came from the U.S. military, which signed a deal for

unlimited use for up to 20,000 soldiers. The British

military is another customer, as are many news media rep-

resentatives (Maney, 2003). Marketing of the new Iridium

is aimed at corporations, not individuals, with a focus on

maritime, aviation, and mobile operations. Iridium now

has a customer base of over 300,000 (Jarman, 2009). The

cost is still substantial for the reborn Iridium but not nearly

as high as before: The telephone, which weighs 9.4 ounces,

costs about $1,500, and one sample calling plan costs $250

a month for 150 included minutes ($1.67 per minute), plus

$1.40 per minute for additional minutes. In addition, there

is a $100 activation fee and a substantially higher rate to

call a telephone operating on another satellite network

(Blue Sky Network Web site, 2010).

A competing LEO satellite system, Globalstar, has

also had a troubled history. With its 48 LEO satellites,

Globalstar does not provide complete coverage of the

planet, but it does offer service in over 120 countries. The

cost of Globalstar’s Freedom 150 plan (in the United

States) is $65 per month for 150 included minutes ($0.43

per minute), plus $0.99 per minute for additional minutes.

The telephone for Globalstar costs about $1,000

(Globalstar Web site, 2010).

Microwave

Station

1

Microwave

Station

2

Satellite

B

Satellite

A

Earth

FIGURE 3.3 Satellite Communications