Can satellites be used to supplement cell phone service? It appears TerreStar Networks and AT&T are going to find out. Word has it that they’ll put a satellite into orbit on July 1, and AT&T will start using it to supplement shortly thereafter. This will cover most of North America, including the US, Canada, Puerto Rico, and the US Virgin Islands. Those who purchase a TerreStar hybrid handset will be able to switch seamlessly between AT&T’s GSM network and the satellite service, allowing for a larger coverage area. There are plenty of benefits to satellite coverage, but it doesn’t come without a cost.
The first benefit which comes to mind is that satellites could provide coverage where it is currently not available. This includes many rural areas in the U.S. Even for areas which are covered, satellites could extend that coverage to surrounding areas. It could supplement service so that the common problem of not receiving signal inside your house becomes obsolete. The possibilities of the coverage everywhere element of satellite service are endless.
While specific pricing is not yet known, the service and equipment figure to be quite expensive. The handset could cost $700 unsubsidized, and while that would come down considerably once AT&T sells it along with a two-year contract, it will still be quite high compared to other phones, at least initially. The cost per minute, according to TerreStar, “should be lower than today’s going rate of about $1 per minute for satellite calls,” which is not at all reassuring.
Meanwhile, AT&T will beef up its 3G coverage using some 850 MHz spectrum purchased from Verizon. This became available after Verizon was forced to divest some assets as part of the Alltel merger.