Advanced technology major, Cleveland (US)-based TRW has picked up approximately seven per cent stake in ICO Global Communications, the 12-satellite global mobile personal communication services (GMPCS) system. The equity has a face value of $150 million (Rs 585 crore).
The $10-billion (Rs 39,000 crore)-TRWs investment decision puts it on par with other large investors in the ICO consortium like Inmarsat, Deutsche Telekom, US Hughes Electronic Corporation and Videsh Sanchar Nigam Ltd (VSNL).
The Indian international telecom carrier holds seven per cent of ICO equity.
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TRW which provides advanced technology products and services for the automotive and space and defence markets is expected to provide certain engineering expertise to ICO and the companies will grant each other cross-licenses for their respective patents relating to global telecom systems, according to an ICO press release. Additionally, TRW will receive certain distribution rights in the US for ICO products and services.
These agreements will permit a merging of the strengths of both ICO and TRW in implementing a medium earth orbit (MEO) satellite system. The ICO system is based on 12 MEO satellites which combine long lifetimes and high system capacities.
The MEO configuration is different from other systems like Iridium and Teledesic which comprise low earth orbit satellites and geostationary earth orbit systems like Afro-Asian Satellite Communications which operate at an higher altitude.
With 1.5 million shares, TRW will become one of ICOs leading shareholders, said Joseph T Gorman, TRW chairman and chief executive officer. The linkage of TRWs Odyssey expertise with ICO is consistent with TRWs strategy to grow its telecom business.
Odyssey was conceived by TRW as a 12-satellite MEO global communications system. TRW plans to turn back the license it received from the US Federal Communications Commission for its Odyssey programme to make available spectrum needed by other GMPCS systems.
TRW will focus its efforts on assisting ICO to obtain authority for its system to operate in the US and elsewhere.
ICO has raised $2.1 billion in equity commitments, has been constructing its system for some two years and is expected to provide service starting in the year 2000. The company has 57 investors, comprising telecom and technology companies, from 44 countries worldwide.
ICOs services are expected to be used by international and domestic cellular users who roam outside areas covered by compatible cellular networks from business, industry and government organisations, mining, transportation, aeronautical, maritime, media and other specialist sectors as well as residents of rural and remote areas lacking adequate local communications.
The first ICO satellite is expected to be launched in the fourth quarter of 1998 and the initial constellation of six satellites are to be in orbit by end-1999. ICO brass expects to have the full 12-satellite constellation in orbit by the turn of the century.
The ICO system is built around 12 ground-based satellite access nodes or hubs all over the world, the first of which is being built by VSNL near Delhi in India. Hughes Space & Communications International has two contracts totalling over $2.2 billion from ICO a $1.36 billion contract to build and supply 12 satellites and associated telemetry, tracking and control equipment and a $925 million deal to supply launch and management services.