Mobile Video for Big Screens
Satellite Player ICO Sets Trials With Clearwire
By Randy Barrett -- Multichannel News, 9/16/2007 8:00:00 PM
Startup venture ICO Global Communications has big plans for a satellite-based, nationwide mobile video service, but the business graveyard is littered with the bones of those who have taken similar routes.
The Reston, Va.-based company, majority-owned by telecom tycoon Craig McCaw, last week announced it will conduct a joint trial with mobile-broadband provider Clearwire — also owned by McCaw — to test an interactive video service that uses both ICO's satellite signals and Clearwire's ground-based network next spring in Raleigh, N.C., and Las Vegas.
“We are well-positioned to be the first provider of next-generation mobile satellite services, and we have a clearly differentiated offering by leveraging integrated satellite and terrestrial networks,” ICO CEO Tim Bryan said in a statement.
ICO isn't aiming at the cellphone video market. Rather, the company wants to offer service to larger screens on the go — wireless PCs and flat-panel displays in cars. The service would include entertainment programming and communication capabilities to customers in the continental U.S.
The plan hinges on the successful launch of a prodigiously sized satellite in January 2008. Once in orbit, the bird would provide 20 Megahertz of spectrum. None of this comes cheap: Building and launching the medium-earth-orbit machine will cost $500 million.
ICO has a public-market capitalization of $1.4 billion. But industry analysts have yet even to size the potential market for large-screen mobile video service and say ICO's value proposition is unclear. ICO plans to offer 10 to 15 channels of “premium content” but has not announced what that might be.
When it comes to mobile-video service of any kind — including programming for cellphones — nobody has quite found the right recipe in the U.S. “Nothing has been super-successful to date,” Jefferies & Co. investment analyst Adam Benjamin said.
Several companies have recently tried cracking the American mobile-video market and failed. Crown Castle International shuttered its Modeo offering in July after failing to line up retail partners, and Amp'd Mobile, which geared its business around selling video and music content to a youth demographic, shut down this summer after filing for bankruptcy.
The history of satellite-based, mobile consumer communications services is even rockier. The greatest failure was Motorola's Iridium venture, which promised global mobile phone coverage, but collapsed in 2000 under the weight of the $5 billion spent to launch its satellites.
ICO spokesman Chris Doherty said the company is different from the others for one reason: It has 20 MHz of spectrum available and can deliver it without taxing mobile devices.
That's an important issue, and one that purely ground-based cellular mobile services haven't been able to solve yet, according to Infonetics Research analyst Jeff Heynen. “The technology to provide broadcast-quality video without buffering or without totally draining your mobile phone's battery after 30 minutes hasn't been available,” he said.
The ICO and Clearwire tests next spring will require a custom “set-top box” in a car's trunk to unscramble the wireless signals. The big challenge is to provide smooth handoffs between Clearwire cell towers in urban areas and the ICO satellite, which will supply service in the hinterlands.
ICO needs Clearwire's terrestrial network around urban areas because satellite signals don't do well around buildings. Meanwhile, Clearwire chief strategy officer Scott Richardson said the joint venture with ICO potentially opens rural areas to Clearwire's wireless services.
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