Dual-Mode Satellite-Cellular Services Are Promising: Study

Further to the announcement of TerreStar Networks and SkyTerra Communications offering dual-mode (satellite and cellular) services in North America, ABI Research recently found that three million satellite-capable LTE smartphones are likely to be shipped in North America in 2012, though that figure depends upon the 4G strategies of U.S. cellular network operators.

 

“Taking the market opportunity at face value, it’s puzzling,” said practice director Kevin Burden. “The likely number of public safety, law enforcement and government market adopters is not enough to support a viable, high growth market. But when you dig deeper, there appears to be a hidden agenda related to using the spectrum for 4G cellular services over the long-term.”

 

Dual mode offerings of both satellite and cellular services are gaining acceptance. A key U.S. regulation, the US FCC Ancillary Terrestrial Component Order of 2003, uniquely permits satellite operators to offer simultaneous satellite and cellular services over their licensed satellite spectrum. ABI Research indicated that this as a subject to evaluate since the spectrum is also enough to provide 4G cellular services in a region where that dedicated spectrum is scarce and valued at a premium.

 

The company’s study highlights that handset vendors are well preparing for that “satellite tax” by embedding “dormant” satellite connectivity in their LTE chipsets and handsets, and U.S. cellular operators are stated to aim at integrating this factor into their otherwise viable acquisition models.

 

“We believe that the greenfield satellite companies’ plan is to forge short-term roaming partnerships with AT&T and other cellular operators and then, when LTE services are deployed, position themselves to be acquired by these major players, including their prized spectrum. It’s unorthodox but clever,” said Burden.

 

ABI Research has been specializing in providing analysis and forecasting of emerging trends in global connectivity. The company’s new study, “Satellite-Enabled Mobile Devices,” is said to offer background and insights on the next-generation of the MSS (Mobile Satellite Services) market, the market opportunities for its ecosystem participants, and forecasts for dual-mode satellite-cellular handset shipments. This report is a part of the company’s Mobile Devices Research Service.