Murdoch's rival in space

As the satellite-phone star wars hot up, Peter Koenig meets the man who's set to play Han Solo to the BSkyB boss's Darth Vader: Profile; Olof Lundberg

OLOF LUNDBERG will be delayed. "He is doing a little DIY," his secretary says. We enter his office a few moments later and, although there is no tool kit on the conference table, ICO's chief executive is pink from the exertion of a re-hanging a print.

Lundberg is a heavy-set man with thinning hair and a broad brow that looks in need of frequent mopping. He tells a good Clinton joke, then - engineer by trade, serious by genetic disposition - he gets down to the task at hand: discussing satellite-based mobile phone networks.

The 59-year-old Lundberg traces his professional interest back to his boyhood in Gothenberg, Sweden, and his early interest in maritime communication. "I was a ham radio operator," he says. "I've been building radios ever since. Just more complicated ones."

Rupert Murdoch's BSkyB introduced the nation to satellite technology even though BSkyB is not directly involved in satellites. It leases transponder capacity from Luxembourg-based SES. Soon, however, Lundberg will mount a challenge to Murdoch.

A more unlikely match-up is hard to imagine. Murdoch, the nonpareil businessman, incorporates his mastery of satellite technology into his famously ruthless drive toward some never-to-come epiphany as the world's greatest media mogul. Lundberg loves satellite technology for itself, although he is no tekkie naif. He talks of "never doing anything at ICO except to generate a profit", and comes across as intelligent and crafty.

"Olof has a tremendous commitment to making ICO happen," says Geoffrey King, the head of British Telecom's satellite operations.

The relevant technology goes like this: In 1957 the Soviets sent Sputnik into orbit. In 1962 AT&T sent the first active relay satellite into orbit. On the mobile phone front "there were limousines in New York with big boxes in their boots and phones in the back in the 1950s," Lundberg says. By the mid-1980s these procrustean mobile phones had metamorphosed into the ubiquitous Yuppie props.

Satellite-base mobile phones entered the picture just eight years ago. During the 1990-91 Gulf War CNN's Peter Arnett made them famous as he broadcast from the roof of his Baghdad hotel. "Arnett's was suitcase-sized, 30 kilos," Lundberg says. "Then there was briefcase-sized. Then laptop. Now hand-held."

Jeremy Rose, founder of the St Albans-based satellite consultancy Comsis, explains that ICO is one of three major groups vying to dominate the yet- to-exist satellite-based mobile phone market. The market for them, Rose guestimates, could reach 30 million subscribers after the turn of the century - with the technology to switch back and forth between terrestrial and space networks.

ICO will compete against Iridium, a consortium sponsored by the US telecoms giant Motorola, and Global Star, a second US-backed consortium.

"Motorola formed Iridium in 1990," Rose says. "It was named for the 77th element in the periodical table of chemicals because the plan was to launch 77 satellites in a low earth orbit. Motorola subsequently cut the number of satellites to 66, but it didn't change the name to dysprosium, the 66th element, because dysprosium sounded like a medicine for tummy upsets."

Iridium has invested roughly $5bn (pounds 3bn). It is scheduled to switch on service on 23 September. Because its satellites will communicate with each other, as well as with land links, costs will be high. Iridium phones will cost roughly $3,000, Rose says. Calls will cost between $3-$5 a minute. "The service will be for the businessman who doesn't care about price," he adds. "The bloke who wants a guarantee he can ring anywhere in the world from anywhere in the world."

Global Star was set up in the wake of Iridium. Because its satellites will communicate less with each other, costs will be lower. So will its phones and call rates. ICO, by contrast, grew out of Inmarsat, a London- based inter-governmental organisation set up in 1979 to exploit satellite technology to improve maritime and aviation communication.

Inmarsat set up Inmarsat-P and entered the satellite-based mobile phone business. But its quasi-governmental status led it to spin off its commercial venture. In 1995 Lundberg, Inmarsat's director-general (and before that a Swedish Telecom employee) quit to run ICO.

The company has 58 shareholders who have put up $2bn of the $4.5bn investment needed for the launch of its service in 2000. Many are state telephone companies - many of them from the developing world - but there are private groups as well.

Because ICO has chosen to use satellites revolving in middle earth orbit it will only need twelve of them and they will last 12 years - not the five expected of lower earth orbit satellites. The disadvantage of MEO satellites is the transmission delay. But ICO says it has the technology to make this delay inconsequential. Rose calculates ICO phones will cost $750 with call charges in the $1 to $2-a-minute range.

ICO is denigrated by its rivals as a company still suffering from a non- commercial orientation. But Cynthia Boeke, editor of the Washington-based Via Satellite magazine, points out that success will turn in good part on relations with telecoms regulators round the world. "Lundberg has excellent relations," she says, "and it would be a mistake to underestimate him."

ICO plans to sell its services not only to globe-trotting businessmen, but also to such niche markets as long-distance lorry companies, and to governments looking to leapfrog existing telecoms technology to set up rural phone networks.

The company is due to get its first feedback from the market soon. Tomorrow its directors meet in Bangkok to discuss details of an initial public offering of shares in the $300m-$500m range. "Satellite ventures are hot on Wall Street," Via Satellite's Boeke says.

Who will win the battle to dominate the satellite-based mobile phone market is anyone's guess. "I know there's a market there," says BT's Geoff King. "But is there a market for three companies? I don't know."

"You cannot predict," says Comsis' Rose. "In the mid-1980s the experts said British Satellite Broadcasting with its squarial would beat Murdoch with his dish. Look what happened."

Could Lundberg really rival Murdoch as a presence in space? In a world of total inter-connectivity and inter-operability - the holy grail of information technology - anything seems possible, at least for now.

Suggested Topics
Isis fighters travel in a vehicle as they take part in a military parade along the streets of Syria's northern Raqqa province
Arts and Entertainment
Christian Grey cradles Ana in the Fifty Shades of Grey film
filmFifty Shades of Grey trailer provokes moral outrage in US
Life and Style
The veteran poverty campaigner Sir Bob Geldof issues a stark challenge to emerging economies at the Melbourne HIV/Aids conference
Arts and Entertainment
Benedict Cumberbatch and John Malkovich talk Penguins of Madagascar at Comic-Con
comic-con 2014Cumberbatch fans banned from asking about Sherlock at Comic-Con
Arts and Entertainment
Chris Pratt stars in Guardians of the Galaxy
filmGuardians Of The Galaxy should have taken itself a bit more seriously, writes Geoffrey Macnab
Sir Chris Hoy won six Olympic golds - in which four events?
Life and Style
People may feel that they're procrastinating by watching TV in the evening
ebookA unique anthology of reporting and analysis of a crucial period of history
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Trainee Recruitment Consultants - Banking & Finance

£20000 - £25000 per annum + OTE £40,000: SThree: SThree Group have been well e...

Graduate Recruitment Resourcers - Banking Technologies

£18000 - £25000 per annum + OTE £40,000: SThree: Huxley Associates are looking...

Associate Recruitment Consultant - IT

£20000 - £25000 per annum + OTE £40,000: SThree: Computer Futures has been est...

Business Analyst

£300 - £350 per day: Orgtel: Job Title: Business Analyst Rate: £300 - £350 per...

Day In a Page

Backhanders, bribery and abuses of power have soared in China as economy surges

Bribery and abuses of power soar in China

The bribery is fuelled by the surge in China's economy but the rules of corruption are subtle and unspoken, finds Evan Osnos, as he learns the dark arts from a master
Commonwealth Games 2014: Highland terriers stole the show at the opening ceremony

Highland terriers steal the show at opening ceremony

Gillian Orr explores why a dog loved by film stars and presidents is finally having its day
German art world rocked as artists use renowned fat sculpture to distil schnapps

Brewing the fat from artwork angers widow of sculptor

Part of Joseph Beuys' 1982 sculpture 'Fettecke' used to distil schnapps
BBC's The Secret History of Our Streets reveals a fascinating window into Britain's past

BBC takes viewers back down memory lane

The Secret History of Our Streets, which returns with three films looking at Scottish streets, is the inverse of Benefits Street - delivering warmth instead of cynicism
Joe, film review: Nicolas Cage delivers an astonishing performance in low budget drama

Nicolas Cage shines in low-budget drama Joe

Cage plays an ex-con in David Gordon Green's independent drama, which has been adapted from a novel by Larry Brown
How to make your own gourmet ice lollies, granitas, slushy cocktails and frozen yoghurt

Make your own ice lollies and frozen yoghurt

Think outside the cool box for this summer's tempting frozen treats
Ford Fiesta is UK's most popular car of all-time, with sales topping 4.1 million since 1976

Fiesta is UK's most popular car of all-time

Sales have topped 4.1 million since 1976. To celebrate this milestone, four Independent writers recall their Fiestas with pride
10 best reed diffusers

Heaven scent: 10 best reed diffusers

Keep your rooms smelling summery and fresh with one of these subtle but distinctive home fragrances that’ll last you months
Commonwealth Games 2014: Female boxers set to compete for first time

Female boxers set to compete at Commonwealth Games for first time

There’s no favourites and with no headguards anything could happen
Five things we’ve learned so far about Manchester United under Louis van Gaal

Five things we’ve learned so far about United under Van Gaal

It’s impossible to avoid the impression that the Dutch manager is playing to the gallery a little
Screwing your way to the top? Good for Lana Del Rey for helping kill that myth

Screwing your way to the top?

Good for Lana Del Rey for helping kill that myth, says Grace Dent
Will the young Britons fighting in Syria be allowed to return home and resume their lives?

Will Britons fighting in Syria be able to resume their lives?

Tony Blair's Terrorism Act 2006 has made it an offence to take part in military action abroad with a "political, ideological, religious or racial motive"
Beyoncé poses as Rosie the Riveter, the wartime poster girl who became a feminist pin-up

Beyoncé poses as Rosie the Riveter

The wartime poster girl became the ultimate American symbol of female empowerment
The quest to find the perfect pair of earphones: Are custom, 3D printed earbuds the solution?

The quest to find the perfect pair of earphones

Earphones don't fit properly, offer mediocre audio quality and can even be painful. So the quest to design the perfect pair is music to Seth Stevenson's ears
US Army's shooting star: Lt-Col Steven Cole is the man Hollywood calls when it wants to borrow a tank or check a military uniform

Meet the US Army's shooting star

Lt-Col Steven Cole is the man Hollywood calls when it wants to borrow a tank or check a military uniform