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Big Bounce

The satellite business could more than triple, to $29 billion, by 2000 as big aerospace players and dozens of startups race to offer new consumer services and carve up the global marketplace. Here are the main services they'll offer:

PICTURE PERFECT TV: With the launch of Hughes's DirecTV in 1994, digital satellite TV is the industry's first big hit. Satellites beam down as many as 200 crisp channels with CD-quality sound. The U.S. market is attracting big-name rivals such as News Corp. and MCI. Globally, satellite TV could draw 30 million subscribers and $12 billion in revenues by 2002.

GLOBO-PHONES: Loral, Motorola, TRW, and London-based ico are all betting vast sums to meet expected demand for global handheld wireless phone services. Globe-trotting executives could take a single cellular-like phone anywhere they travel as early as 1998. Phones will cost from $750 to $3,000, with charges ranging from about $1 to $3 per minute. Projected market by 2005: 7 million subscribers, $7 billion in revenues.

INSTANT INFRASTRUCTURE: Global mobile-phone providers will also use their systems to provide wireless phones to underserved rural areas in countries such as India, China, and Russia, where consumers typically have to wait five years or longer to get local phone service. Potential market: $6 billion. Lockheed Martin and Asia Cellular Satellite Systems are racing to develop regional satellite phone service in Asia and Latin America, where rapid economic growth has caused a telecom logjam. Projected market: $2 billion.

INTERNET ACCESS, FAST AND CHEAP: Hughes, Loral, Lockheed, GE, Teledesic, Echostar, and others are scurrying to build or buy fleets of powerful birds that will allow consumers to link home computers to the Internet. The two-way satellite connections promise fiber-optic-like speeds. Some plan to package satellite TV and Internet access into a single dish and receiver starting at about $1,000. With service to begin around 2000, the market could hit $10 billion by 2005.

DATA: ACCESS MEDIA INTERNATIONAL USA INC., BEAR STEARNS & CO., PYRAMID RESEARCH INC., BUSINESS WEEK





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Updated June 15, 1997 by bwwebmaster
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