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Industry News

Commercial Market

March 1, 2000
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Commercial Market

Globalstar USA Licensed to Offer Satellite Phone Service
Globalstar USA, the exclusive provider of satellite-based communications services in the US, has received authorization from the Federal Communications Commission (FCC) to market satellite phone service on a limited basis to US customers. The Globalstar system is a state-of-the-art mobile satellite service that extends the coverage of existing analog and digital wireless services, allowing phone calls to be made and received virtually anywhere in the world and offering data capabilities such as e-mail and short messaging. In addition, the company has announced an introductory monthly pricing plan targeted at a broad market. While Globalstar phones are similar in size and weight to earlier hand-held cellular phones, the company intends to offer its services at a more affordable cost. For pricing information, visit www.globalstarusa.com .

Optical Attenuator Market to Reach $1.5 B by 2008
According to a report issued by ElectroniCast Corp., global consumption of optical attenuators reached $178.8 M in 1998 and is expected to increase to $1.5 B by 2008 as a result of rapidly rising quantity growth substantially offset by falling average prices. The consumption value of optical attenuators used for telecommunications networks was $128 M in 1998, representing 71 percent of the total market. Cable television applications consumed $17 M, representing 9.4 percent, while military/aerospace applications spent $16 M, accounting for 8.8 percent. Specialty applications consumed $11 M and premise data networks spent $7 M. By 2008, telecommunications network applications are expected to spend $1.24 B, representing 86 percent of the total market value. Military/aerospace applications are forecast to increase expenditures to $73 M, accounting for five percent, while cable television, specialty applications and premise data network users are expected to account for approximately three percent of the total market.

The report separates the optical attenuator market into three segments: fixed panel-mount, fixed cable assembly, and manual and electronically controlled variable. Electronically controlled variable optical attenuators represented 61 percent of global consumption in 1998 and are expected to dominate the market in 2008 with sales of $1.26 B, accounting for 87 percent. Fixed panel-mount types, which represented 8.1 percent in 1998, are forecast to drop to 2.1 percent by 2008. Manual variable types accounted for 14.5 percent in 1998 and are expected to decrease to 5.9 percent while fixed cable assembly types are expected to decline from 16.8 percent in 1998 to five percent in 2008. For additional information, contact Theresa Hosking, ElectroniCast (650) 343-1398.

Smart Phones to Dominate the Wireless Access Market
Anew report from IGI Consulting, “Wireless Web Wonders,” predicts that smart phones and personal data assistants (PDA) will dominate the wireless Internet market. The number of smart phones produced is expected to increase to 88 percent (330 million units) in 2003 while PDA sales are expected to increase to 118 percent (35 million units) during the same period. By 2003, the report forecasts that approximately 33 percent of an estimated one billion cellular subscribers will use smart phone-enhanced displays, data entry and storage capabilities to conduct e-commerce, access the Internet via mobile portals, run server-assisted applications and use location-based content and services.

The report also concludes that Palm Computing will dominate the wireless access operating system market while Microsoft’s Windows CE will continue to dominate certain vertical market segments. Handspring and Symbian are also forecast to compete for market share. In addition, the report analyzes the business opportunities available to companies that are planning to profit from wireless Internet access. Qualcomm’s High Data Rate system, third-generation technologies, location-based technologies and smart phone access to wireless local area networks are described. For additional information, contact Tony Carmona, IGI Consulting (617) 232-3111 or e-mail: tcarmona@igigroup.com.

Wireless Broadband Revenues to Reach $3.4 B in 2003
The Strategis Group’s report, “US Wireless Broadband: LMDS, MMDS and Unlicensed Spectrum,” projects that wireless broadband revenues will increase from $11.2 M in 1999 to $3.4 B in 2003. Growth in local service and Internet access revenues and broadband wireless deployment are expected to be the driving factors for the significant increase. By 2003, 34 percent of US households and 45 percent of US businesses are expected to be serviced by broadband wireless networks. Wireless broadband technologies, such as local and multipoint distribution systems (LMDS), multichannel multipoint distribution systems (MMDS) and unlicensed spectrum systems, are capable of providing voice, video, data and Internet service. With the exception of cable modems, wireless broadband is the only technology capable of serving all three markets. Wireless broadband technologies can provide throughputs ranging from 64 kbps up to 15 Mbps. Unlicensed spectrum networks are currently utilized in almost 200 markets nationwide while LMDS and MMDS systems have not yet been widely deployed. However, MMDS spectrum holders Sprint and MCI WorldCom have announced plans to begin MMDS deployment by the middle of this year while LMDS licensees NEXTLINK and HighSpeed.com began installations in late 1999. For additional information, contact The Strategis Group (202) 530-7500.

Boeing to Acquire Hughes Satellite Systems Business
The Boeing Co. has announced plans to purchase the satellite systems business of Hughes Electronics Corp. in an all-cash transaction valued at $3.75 B. Under the terms of the acquisition, Boeing will acquire Hughes Space and Communications Co., a communications satellite manufacturer; Hughes Electron Dynamics, a supplier of satellite electronic components; and Spectrolab, a provider of solar cells and panels for satellites. Boeing’s large-scale integration capabilities, coupled with Hughes’ satellite systems operation, will enable Boeing to offer unparalleled integrated space, air and terrestrial information and communications systems to its customers. As a result of the acquisition, Hughes will become one of Boeing’s largest customers with contracts in place for five HS 601 HP satellites for PanAmSat and DIRECTV,® and five HS 702 satellites for PanAmSat and the Hughes Spaceway™ broadband system. The transaction is subject to regulatory and governmental review and is expected to close by the middle of this year.

In related news, Hughes has announced plans to narrow the focus of its wireless business at Hughes Network Systems (HNS), Germantown, MD. The wireless business intends to discontinue its mobile cellular and narrowband local loop product lines after fulfilling outstanding obligations for the discontinued products. As a result of the decision, the wireless business will concentrate on its broadband point-to-multipoint product line. The company expects to record a fourth-quarter pre-tax charge of approximately $275 M. Hughes Electronics is undergoing major changes in its corporate structure and business mix that are designed to sharply focus the company’s resources and management attention on its high growth entertainment, information and business communications services.

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