Qualcomm, Loral to Develop Satellite-Based Phone System
Qualcomm and Loral Corp. unveiled a planned $850-million satellite-based telephone system Thursday that would directly compete with a similar global communications system proposed a year ago by Motorola Corp.
Globalstar, to be operated by a jointly owned subsidiary of San Diego-based Qualcomm and New York-based Loral, would offer voice and data services to customers in the United States and around the world who aren’t well-served by existing land-based and cellular telephone systems, the companies said.
Signals would be relayed via 48 low-orbit satellites that would ring the Earth. The satellite-based system also would be linked to existing land-based and cellular telephone systems, according to the companies. Construction of the system, which first must be approved by the Federal Communications Commission, could begin in 1992, according to the companies. The system would be ready for use in early 1997.
The system is designed to provide telephone service to areas of the United States and other countries that are not well-served by land-based and cellular telephone systems, Qualcomm spokesman Harvey White said Thursday.
Qualcomm recently filed with the Securities and Exchange Commission for a $50-million initial public offering. The company did not say how the proposed global telephone system will be financed.
The Qualcomm-Loral system would compete directly with Iridium, a similar global communications system proposed last year by Motorola, according to telecommunications industry observers. Iridium would utilize 77 low-earth satellites to relay telephone signals to users “on land, at sea or in the air,” Motorola said.
Although the two systems would utilize similar technology, Motorola is concentrating on foreign markets, while the Qualcomm-Loral venture would first establish itself with domestic customers before developing a worldwide market, the companies said.
In a related announcement Thursday, Motorola announced the appointment of Robert W. Kinzie as chairman and chief executive officer of Iridium Inc. Kinzie had served as director of strategic planning for the International Telecommunications Satellite Organization.
Motorola also said that Iridium, which will have headquarters in Washington, soon will offer shares of Iridium stock to “selected companies, including Motorola Inc.” Motorola also expects “other rounds of financing” aimed at “major telecommunications companies throughout the world.”
