By Douglas G. Dwyer
President, Globalstar

For developing economies around the world, recognition of the fact that modern telecommunications is critical and fundamental to nation building is growing quickly, as is the realization that wealth does not create telephone density, but that telephone density creates wealth. A well developed telecommunications infrastructure allows a nation's government and people to gather, process, and disseminate information rapidly within national borders, and to points around the world; to respond to emergencies; to utilize up-to-the-minute information in a beneficial way (from the latest weather report to crop disease updates); to participate in the global economy; help educate its populace, and provide for many other necessary services.

Unfortunately, the majority of people around the globe do not have access to adequate telecommunications services, indeed, many have never even used a telephone before. According to the ITU, two thirds of the world's telephone lines are installed in the high income nations which account for just 15 per cent of the world's population. Developing nations desire the benefits of a telecommunications infrastructure, but find themselves limited in what they can provide their people, financially or materially. They often face many obstacles, such as dispersed populations, and rugged or impassable terrain that makes the emplacement of standard telephone lines impractical.

But the advent of a new generation of satellite telecommunications systems, Global Mobile Personal Communications by Satellite (GMPCS), promises to provide domestic and international service links for developing nations at a reasonable cost. One such GMPCS system is called Globalstar. The Globalstar GMPCS system is based on a constellation of 48 low-Earth orbit (LEO) satellites that will provide digital voice and data/fax communications through the use of low power cellular phone-sized hand units with omni-directional antennas. This makes them flexible, and mobile, allowing for a variety of telephony services that ranges from serving global business travellers, to providing fixed satellite phone booths for rural communities.

Moreover, not only will GMPCS systems provide mobile telecommunications services to users around the world, but GMPCS also promises to provide affordable basic telephone service to communities that have no phone service whatsoever. Alternative rural voice service systems, such as VSAT stations which use geostationary satellites, can cost in the tens of thousands of dollars (US), and can be difficult to maintain in rugged areas and climates. In contrast, a Globalstar GMPCS fixed-site 'village' phone booth will cost only a few thousand dollars at most, and will be much simpler to install and maintain.

Indeed, the ultimate success of GMPCS will depend on the affordability of the various proposed systems and their flexibility to adapt to the unique needs of many different nations. A host of issues associated with this challenge must be addressed if GMPCS is to be made reality. For example, many nations are concerned that their national regulatory authorities will have no control or influence over the operation of GMPCS systems within their borders or GMPCS calls entering and exiting their country via satellite. They are also worried about the impact of potential reductions in international telecommunications revenues.

These concerns can best be addressed by engaging in dialogue and working with national authorities and PTTs at an early stage, and by forming partnerships and operating arrangements with local entrepreneurs and service providers. The Globalstar system, for example, recognized this need early in its development process, and has put such cooperation at the heart of its business plans and system strategy.

The Globalstar GMPCS system is an enhancement to existing PTT, cellular and other telecommunications networks, not a competitive network. The Globalstar system will enable its service providers to rapidly and economically extend modern telecommunications services to significant numbers of people who currently lack basic telephone services, and to enhance wireless telecommunications in areas currently underserved or not served by existing cellular systems. Moreover, this service will be priced at a very low cost as compared to other satellite-based services.

Indeed, the cellular companies and PTTs of the world today do not see Globalstar as a threat because Globalstar is providing additional service to their already existing infrastructure, and will operate within the guidelines of their national regulatory authorities. Calls made via the Globalstar system are routed through the existing national infrastructure, ensuring that PTTs will receive their fair share of the revenue stream, and be able to exercise their customary authority.

Moreover, the Globalstar system was expressly designed to be price elastic, cost efficient and affordable to end-users. The overall cost to build, deploy and operate Globalstar will be approximately US$2.2 billion - one of the lowest priced GMPCS systems. As such, wholesale prices (the price to Globalstar service providers) will range from US$.35 per minute to US$.53 per minute, depending on volume. In turn, Globalstar's service providers will be able to charge very competitive prices to end users, and yet bring more service to those people of the world who have not had either mobile or fixed services within their geographical region of service.

Another issue that can be resolved by working with local and international regulatory bodies is the issue of regional and global roaming. Handheld and vehicle-mounted user terminals will allow people to utilize GMPCS services from virtually anywhere on the Earth, in some cases regardless of national boundaries and local national policies. At the national level, GMPCS providers must ensure that they will not provide service to unauthorized users, and in cases when a national government does not desire such service to occur within its borders.

The Globalstar system, for example, will be fully integrated with existing fixed and cellular networks, and does not by-pass the PSTN. It will therefore fully comply with national service preferences, and the system can deny service to unauthorized users.

On the other hand, because roaming is highly desirable, Globalstar supports steps to encourage the growth of GMPCS. In order to allow transborder roaming, both on a regional and global basis, Globalstar supports the optional use of GMSS numbering codes for areas where local code is not available.

Equipment Type Approval is another factor that can help or hinder global roaming. Globalstar adheres to FCC and ETSI standards, and works with national regulatory bodies via local and regional partners to secure Equipment Type Approval. Since many nations are accepting FCC and ETSI standards in lieu of their own, making them their own de facto standards, it might be desirable to institute a Universal Equipment Type Approval regime, perhaps coordinated through the ITU. This could speed the type approval process, clear up uncertainties, and facilitate worldwide roaming of GMPCS User Terminals. These, and other issues, can only be resolved by cooperating with national, and international regulatory authorities.

Another key issue is market access. Globalstar expects GMPCS to play an important role in meeting the present and future basic communications needs of developing and lesser developed countries. If the full benefit of GMPCS is to be enjoyed by all countries, not only in developing and lesser developed countries, it must be recognized that GMPCS service providers must be treated differently than traditional, government-owned or monopoly wire-based telecommunications organizations. In other words, even though GMPCS providers may in some cases fill an unmet need for basic telephony when no other service is available, it is neither necessary nor desirable to regulate them in a traditional manner (i.e., by price regulation, control over competitive entry and subsidization).

That is not to say that concerns that have been expressed regarding bypass, revenue loss, security, and national sovereignty are unimportant. To the contrary, they are very important and must be addressed. Globalstar submits, however, that new approaches to these concerns are needed. GMPCS will bring high quality telephone service to places that have not had such service. The service will stimulate economic growth and will significantly improve the quality of life for inhabitants. The types of concerns mentioned above vary country-by-country and can, in Globalstar's view, be resolved on a national basis through the cooperative efforts of the service providers and the national government. Reaching a common understanding of the potential of GMPCS and the concerns associated with that potential should be the primary objective of the upcoming ITU-sponsored Policy Forum and the ITU's member nations.

And that potential appears to be great, especially if judged by the large number of companies who have committed substantial resources to offer GMPCS services. How many GMPCS operators can the marketplace sustain? In a marketing study performed in 1992, KMPG Peat Marwick, conservatively estimated that the total worldwide GMPCS subscribers in 2002 would be 5.3 million, of which 2.7 million would be mobile (portable and vehicle-mounted) and 2.6 million would be rural/fixed GMPCS services. More recently, MTA-EMCI Telecommunications Consultants calculated that demand for GMPCS mobile subscribers alone, (not including GMPCS rural/fixed site phones) would range from 9 to 15 million subscribers worldwide by 2004. Moreover, Pyramid Research, in a recent study, projected that GMPCS subscribers in developing countries would grow from 80,000 at year-end 1997 to 34.9 million by 2010. Using these projections, Globalstar conservatively expects to serve 2.7 million subscribers by 2002 and 16.37 million by 2012.

The benefits of GMPCS to the developing nations of the world are clear: rapid, affordable access to modern telecommunications services that can be of immense benefit to their economic development and national building activities. GMPCS systems will play a crucial role in national economic development, and will allow the developing nations of the world to participate in the worldwide Personal Communications Services revolution.

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