American Satellite Co. of Rockville and Mitel Corp. of Ontario will form a U.S. corporation to provide business customers with satellite services, including a long-distance telephone network.
The agreement in principle to create the carrier corporation represents ASC's entry into the long-distance telephone business and offers competition to American Telephone & Telegraph, the only other provider of a similar package of services, ASC officials said.
Along with long-distance telephone service, the company will provide data transmission, video conferencing and other related services. It will combine ASC's satellite capability with Mitel's switching systems. Switching allows a number of customers to use the same transmission channel, promoting greater efficiency and lower costs.
The service is expected to begin early in 1984 and to produce more than $250 million in revenue by the end of 1988. American Satellite, itself a partnership between Fairchild Industries and Continental Telecom Inc., will own 75 percent of the new entity. Mitel, an intemational manufacturer of telecommunications equipment, office products and semiconductor devices, will own 25 percent.
"No other satellite carrier is offering this service except AT&T, and they provide it only for larger customers," said a spokeswoman for ASC. She said that, although small and medium-sized business customers might be able to put together a similar package from a variety of sources, the new company will be the first to offer the services in "one-stop shopping."
The service will be offered initially in New York, San Francisco, Los Angeles, Dallas, Chicago, Denver and Atlanta, and eventually will be expanded to a 27-city network.
In another announcement, ASC said it has reached an agreement with Transcanda Telephone System to provide satellite communications into Canada. The agreement makes it the only U.S. satellite carrier to do so, the company said.
Under the agreement, the two companies will make available voice, data, facsimile and video teleconferencing services in both countries. The package will allow ASC to provide customers across the border with the same services that it provides in the United States. The services will not include the kind of switched-voice communications involved in the deal with Mitel.