Tech analysis: Iridium and 3G

When I first read about Iridium, the global satellite-based mobile phone system, I thought it was a cool idea. When I read more about it, and discovered how the service actually worked, I knew it would never sell.

The thing about Iridium was:

  1. The phones didn’t work indoors, or in cars, buses or trains.

  2. The sound quality was worse than a conventional digital mobile phone.

  3. The USA was divided into five vertical stripes or ‘zones’, and you could only have your service activated in three zones at once. If you wanted to travel from New York to LA, you had to call twice on the way and have your service modified, to keep your phone working and make sure you didn’t miss any calls.

  4. If someone sent you a pager message or voicemail notification while you were indoors, in your car, or in the wrong zone, it was silently discarded.

  5. The phones needed a thick 20cm antenna.

  6. The phones were about $1000 each.

  7. The Iridium satellites were placed in very low orbits, to work around signal strength problems. This meant that the orbits inevitably decayed, which meant that if the company had managed to stay afloat for more than a few years, it would have been faced with the problem of launching a whole new fleet of satellites, at a cost of (more) billions of dollars.

  8. Regular land-based GSM phones are available for $99 which work in most major US cities, and all around the world. (I’ve got one. It’s great.)

So as you can see, it didn’t take genius-level intelligence to work out that Iridium would fail. The real mystery is how anyone ever thought it might be a success.

I’m starting to feel the same way about so-called 3G digital mobile phones. The 3G digital standards will supposedly allow high-speed wireless Internet access worldwide, enabling applications like mobile videophone, high quality audio, and proper web browsing while mobile.

This time, the problems are financial rather than technical. The European telecom companies went absolutely crazy last year while they were bidding for the spectrum licenses. Like trailer park women in an eBay frenzy, they kept outbidding each other for something that’s really not worth that much.

The result, as reported by the Electronic Telegraph, is pretty grim. When you take the license fees, add the cost of upgrading the network hardware, and then divide by the projected number of digital mobile phone customers, you find that upgrading to 3G will cost an average of $1000 per customer. And that’s assuming everyone wants to upgrade. What were they thinking?

The other day I was in a store, and a sales assistant asked me if I was interested in wireless web access. I explained that I already had wireless e-mail from my phone, and that I could get web access for an extra $5 a month—but that it wasn’t worth it for me. The chances of my signing up with a whole new service, like Palm’s ridiculously expensive (and metered), are zero.

Obviously there are a few people who’d pay big bucks for 3G and/or wireless Internet; but I suspect my reaction is pretty typical of most consumers. I don’t even have DSL or cable modem—it’s available, but I don’t think it’s worth $40 a month. I’d pay about $40 a month for high-speed wireless Internet access, if it was unmetered and I could replace my existing dialup at home with it too; but at that price, they’d need to keep me as a 3G customer for about three years just to break even. So I can’t see 3G ever catching on, which is a pity.