Vodafone signs up for dollars 1.8bn satellite telecoms venture: Consortium to launch global mobile service

VODAFONE has joined forces with nine other telecommunications and technology companies to build and operate a dollars 1.8bn satellite system for mobile telecommunications. Vodafone, which will take a 10 per cent stake in the consortium, has committed itself to an initial investment of dollars 37m, payable over the next year.

The consortium, called Globalstar, is lead by Loral, a US defence electronics and space company. The service is intended to come into operation in 1998, offering voice and data communications between any two locations in the world. The partners say callers will pay only a small premium over existing cellular mobile telephone charges and that the telephones will cost about the same.

Earlier this week, Microsoft, the world's largest software company, announced a joint venture with McCaw Cellular to build a dollars 9bn satellite communications system to carry anything from telephone calls to high-quality images and interactive video.

Globalstar expects to have 2.7 million subscribers and to be generating revenues of dollars 1.6bn by 2002. By 2012, the subscriber base could swell to 16 million, the group said.

Vodafone said that customers on its recently introduced digital cellular telephone service, GSM, would also be able to use Globalstar.

GSM allows calls to be made from anywhere in Europe but Globalstar will allow Vodafone's GSM customers to make calls from the US and elsewhere where the local mobile standards are not compatible with GSM.

Other partners in the consortium which, like Vodafone, will be both investors and operators, include Alcatel of France, Deutsche Aerospace, and Dacom and Hyundai of Korea. PacTel of the US also hopes to be an investor/operator following its spin-off from Pacific Telesis, and other companies will join up as investors and joint developers of the technology.

Globalstar will be in competition with Iridium, a similar venture led by Motorola of the US.