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Selling Inner China on the Satellite Age : Telecommunications: U.S. firms pitch phone system for remote villagers in the nation’s interior.

From Reuters

For Herdsman Ma, deep in the great Chinese outback, the telephone is something newfangled that his village and hundreds of others have never seen.

But if some ambitious U.S. companies get their way, Ma and isolated villagers like him may soon be using the “electric talk"--the literal translation for a phone.

A vast remote network is now possible via a constellation of low-orbit satellites tied into the world’s most advanced telecommunications.

Proponents of the Iridium, Globalstar and Teledesic and satellite systems still on the drawing board are eyeing China’s phoneless interior as perfect for their technologies.

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“Remote villages that have never had telephones could set up Globalstar satellite phone booths for just $1,500 to $2,500 each,” executive Anthony Navarra said at a Beijing forum where he pitched Globalstar to 200 telecom officials.

He said hand-held mobile telephones using the same technology would give reliable voice and computer data service anywhere in China--whether from a bustling Shanghai street or the desolate oil fields of the Taklimakan desert.

China’s drive to leapfrog out of the communications dark ages with massive investment in top technologies has triggered an invasion of Beijing by the world’s telecom executives.

Although the telephone penetration rate has tripled to 2.15% from just 0.7% in 1988, this still amounts to fewer than 40 million phones for 1.2 billion people--one of the lowest densities in the world.

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Fearing that poor communications could cripple economic growth, China is spending $6.2 billion this year alone in its quest to have 140 million phones by 2004. At least $7 billion in foreign capital will be used this decade.

Satellite mobile phone systems are seen as a sensible alternative to the huge expense of laying fiber optic or even copper cable to the remote interior.

They also could help quench the voracious appetite for communications in China’s cities, where cellular phones have tripled in two years to 400,000.

But the Communist government, citing national security concerns, insists on total control over China’s telecommunications and has barred foreign ownership or management in its network.

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The trick for Globalstar and other foreign providers is to persuade Beijing it will not sacrifice its sovereignty by granting them access to the explosive telecommunications market.

“Globalstar . . . can provide low-cost, advanced telecommunications services to the whole nation while affording the Chinese government full control of the network inside China,” Navarra told the Beijing forum.

The technologies are breathtaking in a country where until only a few years ago, home telephones were out of reach for all but the Communist Party elite.

As early as 1998, a pocket-sized Globalstar mobile phone or fixed “village satphone” could digitize Herdsman Ma’s words and beam them from a tiny antenna to any of 48 Globalstar satellites orbiting 450 miles overhead.

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