No Network Needed: AT&T to Sell First Satellite Smartphone

AT&T plans to start selling the first satellite smartphone, TerreStar Genus, on Tuesday.AT&T (T) has weathered plenty of complaints about spotty cell phone coverage. On Tuesday, it will start selling its first phone that includes a backstop for AT&T's own network, over a satellite. That means blanket coverage of the U.S., even in the wilderness or hundreds of miles offshore.

The new phone, the TerreStar Genus, could be an important tool for boaters, fishermen, forest rangers, emergency crews and others who go outside regular cellular coverage.

There are a number of caveats, though. To use the phone, it has to have a clear view of the southern sky, where the satellite hovers, with no intervening trees, buildings or hills. That restricts its use to the outdoors. The satellite is aimed at the U.S. and doesn't provide global coverage in the same way Iridium Communications's (IRDM) satellite constellation does.

AT&T will initially be selling it to professional customers through business channels, but it will be in retail stores later this year, said Chris Hill, the Dallas-based phone company's vice president for Advanced Enterprise Mobility Solutions.

The Price of Better Coverage

The phone will cost $799 without a two-year contract, and requires regular AT&T voice and data service plans. It uses the AT&T network where it's available. The option to be able to switch over to the satellite costs $25 extra per month, and then 65 cents per minute of calling.

Calls won't be the only way to communicate using the Genus: It's the first satellite phone that's also a full-blown smartphone. It runs Windows Mobile 6.5 software and has a full-alphabet keyboard and looks much like a slightly thicker BlackBerry. It doesn't have a large, protruding antenna, like other satellite phones do.

It can send and receive data over the satellite, which means it can be used for email and Web surfing. The cost, like the satellite, is sky-high: $5 per megabyte, or 400 times more expensive than a standard $25-per-month terrestrial data plan.

Text messages, by comparison, are a bargain. They're 40 cents each, only four times the piece rate for cell phones.

The phones will communicate with the world's largest commercial satellite, owned by TerreStar (TRST). It launched last year, and unfolded an umbrella of gold mesh, 60 feet wide, as a dish antenna to pick up the faint signals from phones 22,000 miles below.

Slimming the Satellite Phone

The giant antenna in the sky means the phones can be relatively small. But it's uncertain whether TerreStar can avoid the fate of other satellite phone companies, even with a smartphone that's almost up to date. The industry has suffered a string of bankruptcies, wiping out billions in investor capital. TerreStar's stock price reflects this: It closed at $26 Monday.

AT&T and TerreStar said last year that they'd have the phone out early this year, but didn't provide details like pricing. It was delayed for six months to straighten out the system, Hill said.

It's not the first time a phone company has tried to sell combined satellite-terrestrial phones. Sprint Nextel (S) sold Iridium phones in 1999, and Airtouch, a predecessor of Verizon Wireless (VZ), sold Globalstar phones a year a later.

"Neither of them had any meaningful success because there just wasn't mass market demand for the phones," said Tim Farrar, a satellite industry consultant.

Hill said the Genus is a different breed, because it can be used a main phone, with most of the conveniences expected from smartphones, without the bulk of a traditional satellite phone. The cost to include the satellite option is also coming down, which means the feature could show up in more, and cheaper, phones in the near future, he said.


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drw465784

I want to have the extra cash to buy luxury items like the Smart Phone but I have to deal with Sales Tax Hotel Tax School Tax Liquor Tax Luxury Tax Excise Taxes Property Tax Cigarette Tax Medicare Tax Inventory Tax Car Rental Tax Real Estate Tax Well Permit Tax Fuel Permit Tax Inheritance Tax Road Usage Tax CDL license Tax Dog License Tax State Income Tax Food License Tax Vehicle Sales Tax Gross Receipts Tax Social Security Tax Service Charge Tax Fishing License Tax Federal Income Tax Building Permit Tax IRS Interest Charges Hunting License Tax Marriage License Tax Corporate Income Tax Personal Property Tax Accounts Receivable Tax Recreational Vehicle Tax Workers Compensation Tax Watercraft Registration Tax Telephone Usage Charge Tax Telephone Federal Excise Tax Telephone State and Local Tax IRS Penalties (tax on top of tax) State Unemployment Tax (SUTA) Federal Unemployment Tax (FUTA) Telephone Minimum Usage Surcharge Tax Telephone Federal Universal Service FeeTax Gasoline Tax (currently 44.75 cents per gallon) Utility Taxes Vehicle License Registration Tax Telephone Recurring and Nonrecurring Charges Tax Not one of these taxes existed 100 years ago, & our nation was the most prosperous in the world. We had absolutely no national debt, had the largest middle class in the world, and Mom stayed home to raise the kids. We also were A Common Law Country! I have set up a place that the poor and middle class in the country can start to get some of this tax money back. It is our turn to have a piece of the action. Here is my way to get your loot back. Just google EASY STOCK CASH and click the first link. Once you get there, go right to the PENNY STOCK page to see what the rich don't want you to know.

September 21 2010 at 5:14 AM Report abuse rate up rate down Reply