"The Iridium problems are old news," said veteran satellite consultant Leslie Taylor. "Most of the negative impact of the failure is almost over."

"The Iridium impact has been played out," said Greg Caressi, a satellite analyst with Frost & Sullivan in Silicon Valley, California. "When Iridium gets brought down, the only concern will be funding for other companies in the future. But even that will not last forever."

Delta 2 Globalstar 3 launch, with Delta 1 in foreground.

Motorola spokesman Scott Wyman would not discuss the details of the decommissioning strategy, but said that "we have a plan in place and we are in voluntary and courtesy reviews with government agencies and we will put together a timetable as soon as possible" for bringing the birds down.

Though Iridium may have spoiled the well for others in the sector, most analysts agree that the impact will likely be short-lived.

~

"There definitely is a market for mobile satellite service," said Roger Rusch, president of consulting firm TelAstra in Palos Verdes, California. "There will always be a few diehard customers who will use these products."

The biggest problem, however, is lowering the price of using these systems, Rusch said.

Others agreed that price is the key to future success.

"With 80 percent of landmass not covered by cellular service, MSS will be able to compete in those markets provided the up-front costs come down," one analyst from a prominent Wall Street brokerage house said off the record.

Analysts are placing bets on Craig McCaw's plans for ICO-Teledesic.

Globalstar's vendors have increased their marketing effort with promotions that have trimmed phone prices from around $1,000 to below $700. Per-minute charges range from 73 cents to $3, depending on location. Globalstar collects 45 cents per call and vendors get the rest. In areas where the Globalstar vendor offers cellular coverage, the phone switches to cell mode and the customer is billed at regular cellular rates.

In comparison. Iridium calls ranged from $2 to $4 per minute, although surcharges and taxes imposed by some countries could push the cost higher.

"Their prices have come down quite a bit," Leslie Taylor said. "And because it has a much more sensibly designed system than Iridium, its costs are lower."

Despite it’s price-cutting measures, Globalstar has had its share of problems. In late June, a bank loan went into default, but was later paid off by a group of companies including Lockheed Martin for Globalstar; their stock prices fell at a fast clip; and, junk bonds trading at less than 30 cents on the dollar.

"In a vacuum, Globalstar has done very well," Caressi said. "The only problem they have had is the constant stream of negative news that has been pulling at them making it difficult for them to develop their market."

At the end of June, the company said it had only signed on about 13,000 customers, far short of the more than 500,000 subscribes that Chairman Bernard Schwartz projected would sign up this year.

What went wrong?

"Nothing, it’s just that these things just take longer than people think they are going to take," said Leslie Taylor. "I don’t think that Globalstar has turned the corner yet, but they will in 2001."

~

Others disagree, saying that Globalstar is on its deathbed and will be bankrupt by the end of the year.

"The real winner will be Inmarsat, which has been offering mobile satellite services for about 20 years," Rusch said.

Considered the partriarch of MSS, the London-based company also has a vision, Rusch said. Inmarsat continues to look at the mobile-data market. This past fall, the company introduced its Global Area Network product (GAN), a laptop-size global data communicator that can be hooked up to a laptop to provide a 64 kilobyte per second connection from anywhere in the world.

"They are a profitable and thriving business and are planning an IPO (initial public offering) next spring," Rusch said.

Another winner in the sector is Asia Cellular Satellite International (ACeS).

The $800 million geostationary system provides coverage in the densely populated Asian region, including Indonesia, the Philippines, Thailand, India and China.

Teledesic's chief executive is going after the broadband data market.

The Bermuda-based company’s strategy of targeting regional versus global coverage has been applauded by analysts.

"This is a company that has targeted a region in the world where 3.5 billion people live who have no terrestrial alternatives," Rusch said. "This is the market that Globalstar has always talked about."

Overall, analysts agree that the key to the success of MSS will be ubiquitous high-speed data service all over the planet. One company that sees the future of data is ICO-Teledesic.

"I think we will provide cost-effective, high-quality voice services, but the world has changed in the past two or three years. People have gotten used to high-speed access to useful applications, including the internet from the desktops," he said.

ICO-Teledesic Global was formed after a McCaw-led rescue of mobile-global satellite company ICO Global Communications from bankruptcy court. ICO Global filed for bankruptcy protection before launching services. McCaw already had established Teledesic to develop a satellite-based internet-in-the-sky service.

"Teledesic will come to market as a broadband service provider," Caressi said. "And it will be a combination of a MEO (middle Earth orbit) and GEO (geosynchronous orbit) system."

"ICO-Teledesic will definitely be a survivor because they are benefiting from waiting to see how the market plays out," one analyst said. "And, they are going after a broader market of voice and internet capability."