Until recently, satellite companies were the laughingstock of the telecommunications industry.
In particular, Iridium, formerly of Washington, found itself the butt of many jokes. People compared its oversize satellite phones to bricks -- just as heavy, and just as ineffective at making a call indoors. Iridium filed for Chapter 11 bankruptcy protection in 1999 after squandering a $5 billion investment; the company flopped only nine months after it launched.
That debacle pretty much summed up the satellite industry's image in recent years: clunky and out of date.
Now, the reincarnated Iridium Satellite -- revitalized thanks in large part to a $36 million-a-year contract with the Defense Department -- along with the rest of the industry seems to be making a comeback. Operation Iraqi Freedom has showcased all kinds of satellite services, and the industry is trying to position itself to benefit from the growth of a new industry: homeland security.
"There's no question, a lot more attention has been placed on us and the satellite industry than before," said Gino Picasso, chief executive of Iridium Satellite, which is now based in Arlington. Traffic has more than doubled on the company's network since troops were deployed to Iraq, and the positive media coverage has increased, too, he said. Iridium is near closing on two homeland-security-related government contracts worth $10 million to $15 million each, he said.
"The awareness from the war has created the security that the business is viable and has invited attention and more business," Picasso said.
Consumers have watched round-the-clock media coverage from the Middle East delivered by reporters in the field transmitting their feeds from technology using new, smaller satellite antennas. Satellites have served an important role in surveillance as well, helping transmit mapped images to military command centers. Back home, satellite firms are busy pointing out that their infrastructure is well suited for maintaining domestic security -- tracking moving trucks, nuclear generators or border entry points -- which may prove critical in preventing terrorist attacks.
Satellites offer some basic advantages over ground communications networks: They're less vulnerable to terrorist attack and offer expansive geographic coverage. A single geostationary satellite is 23,000 miles up, covers a third of the Earth, and can simultaneously send and receive signals from anywhere in its coverage area. Many companies have upgraded their satellite fleets to transmit larger amounts of data faster.
"Now it's become a little easier to show the world what we can do," said David Cavossa, director of the Alexandria-based Satellite Industry Association. The war has shown how instrumental satellites can be in areas that don't have fiber-optic or other telecommunications infrastructure, he said. "People are just starting to discover how satellites are being used," he said.
The renewed interest is a relief to the satellite industry, which during the mid- and late 1990s launched new birds into space, hoping the anticipated Internet boom would invigorate business for the industry. But that boom didn't materialize, and roughly 40 percent of capacity on satellites went unused, according to some industry estimates.
War has provided at least a temporary surge in business for Washington-based Intelsat, which saw a sixfold spike in its business in the initial days of the war, as broadcasters around the world bought airtime to broadcast video feeds from the Middle East.
Broadcast business is up 35 percent from the Gulf region, said Jon Romm, president of Intelsat's video business. Most of the broadcasters switched from "occasional use" contracts to monthly ones, he said. That flurry of business is only temporary, he said.
PanAmSat, Intelsat's Connecticut-based rival, last month unveiled a satellite venture aimed at selling more to the government. G2 Satellite Solutions, the product of a merger between PanAmSat's government division and Hughes Global Services, will aim to sell more to the Defense Department and eventually the Department of Homeland Security, said Thomas Eaton, executive vice president of PanAmSat.
The company already sells to government agencies including the Defense Department, the Internal Revenue Service and the federal government's procurement arm, the General Services Administration. G2's services have been used to transmit images from Predator unmanned vehicles in Iraq to military control centers, he said. Revenue is expected to grow this year to about $60 million, double PanAmSat's usual amount of government business.
The interest in satellites hasn't escaped notice by analysts.
"As we've seen from Iraq, the use has been phenomenal," said Herschel Shosteck, chairman of Wheaton-based industry research firm the Shosteck Group. "As the situation in the Middle East continues to unfold, military, nongovernment organizations, the press and the Iraqis will depend on mobile satellite providers like Iridium, Globalstar and ICO," he said.
But some of the spike in business is probably temporary, he said.
"Over time, the domestic phone business [in Iraq] will be rehabilitated, and cell phone networks will get set up," Shosteck said. Satellite firms seeing a boost in their business now will have to find ways to compete, he said.
Globalstar officials, however, have seen longer-term business potential since the Sept. 11, 2001, terrorist attacks.
"Starting on that day, I got a lot of phone calls from police and hospital workers. They desperately needed phones to communicate," said Mac Jeffery, a spokesman for San Jose-based Globalstar, which has been operating out of Chapter 11 bankruptcy since February of last year.
Homeland security in particular could be an ongoing source of business, not only with the federal government, but with state and local agencies, said Joseph R. Wright Jr., PanAmSat's chief executive.
Satellites have an advantage over terrestrial carriers, whose networks clearly couldn't handle the telecommunications blockages of Sept. 11, he said. "We feel that this is going to be a real market, and that is the reason we acquired HGS [Hughes Global Services]," he said.
Yuki Noguchi's e-mail address is firstname.lastname@example.org. Download columnist Shannon Henry is on leave; her column will resume when she returns.