Will ’99 be the year wireless becomes airborne?
Iridium, hoping to further entice business
travelers to trust and use the Iridium name, spent $65 million in December to buy Claircom Communications Group
Inc. from AT&T Corp. and Rogers Cantel.
Claircom is the second-largest provider in the United States of telephone
communications to commercial airlines-such as Northwest, Delta International and Southwest Airlines-after GTE
Airfone Inc. The company owns and operates 1,700 phones in various commercial and executive airplanes, allowing
passengers to make phone calls while in flight.
Iridium said the purchase will allow it to further expand its
marketing and phone services to its target market of business travelers.
I am surprised a company like Iridium
already is looking to expand when it still has yet to prove the business plan for its main product, satellite-based wireless
communications.
Telephone service in commercial aircraft is a business that hasn’t really taken off to date. GTE and
In-Flight Phone were the initial pioneers in the industry. GTE has been trying to sell its air-to-ground phone service
since April and In-Flight filed for Chapter 11 bankruptcy protection in early 1997. Rogers in late 1995 revalued its 10-
percent investment in Claircom from $47 million to “almost nothing.”
Meanwhile, more competition
could arrive on the air-phone marketplace.
AirCell Inc. recently received FCC clearance to use its stealth
technology that directs calls made from airplanes to specific cell sites-which could open up the air-to-ground business
even further.
AirCell says its service is cheaper to deploy than phone systems used today on commercial aircraft.
AirCell plans initially to target business jets and personal aircraft-which could be those same high-end customers
Iridium wants.
Nonetheless, if the air-to-ground industry takes off like personal wireless use has recently, the sky
could be the limit.
