By 2000, three satellite systems will enable us to make and receive phone calls, faxes and data from anywhere on the planet.
The three companies responsible, which are backed by telecommunications and IT partners, are prepared to spend plenty of money to ensure the public knows all about them and what they offer.
Two of the three have declared marketing budgets of about 100m. Iridium has launched a global advertising campaign through Ammirati Puris Lintas. ICO Global Communications is to appoint a global agency within the next six months (MW September 24). The third company competing in this market is Globalstar.
However, none of the three systems is operational, so advertising agencies have been asked to promote services which don’t yet exist.
In mid-September, a rocket carrying 12 of the 56 Globalstar satellites crashed. The same week, Iridium, which has its 66 satellites in place, announced technical problems and put back its commercial launch date from September 23 to November 1.
Michael Johnson, ICO global media director, says: “These problems will be quickly forgotten when the services are running.” ICO does not intend to have its ten satellites operational until August 2000, by which time Johnson hopes Iridium and Globalstar will have opened up the market, rather than taking it over.
Johnson adds: “Other people are creating the market and showing the way for us. When we arrive, it will be with a higher quality service and lower prices. By 2005, we intend to dominate the market.”
Iridium, Globalstar, and ICO are marketing to 40 million people. Potential customers are from worldwide business travellers who are unable to use one handset and one number on their travels. The shipping and transport industries, disaster relief workers and developing countries will also be targeted.
In comparison, there are currently 300 million cellular mobile phone users. This figure is expected to rise to over one billion by 2005, with more people using mobiles than land-line phones.
ICO plans to spend up to 100m on its global advertising campaign. Chris Moss, Orange’s launch marketing director and former Lloyds TSB brands director, has been appointed as vice-president of brand communication.
Moss says ICO is looking for an agency with global direct marketing and loyalty programme capabilities. Young & Rubicam currently works with ICO on a project basis from its Geneva office.
“You don’t want to drive custom for a product which is not yet available – it is a turn-off for consumers,” says Y&R Geneva media director Fran Costello. She adds that establishing the brand is the first step.
ICO is not working from a clean slate as far as gathering data is concerned. It has access to the subscriber bases of its postal and telecoms backers.
Costello believes that establishing difference of service is more difficult: “It is a fine line – we don’t have a service yet and neither do our competitors.”
The satellite services, which will work through handsets varying in price from 450 to almost 2,000, will be offered alongside that of the terrestrial mobile telecoms. “We will enhance their [the terrestrial networks’] present offer,” says Johnson.
The specially designed handsets, costing between 450 and 1,000, will switch to a satellite connection when the call falls outside the 20 per cent of the earth’s surface covered by terrestrial cellular mobile phone networks. But when in range, they will use existing cellular phone networks.
Each of the three companies have terrestrial mobile phone network partners. Vodafone has a 3.14 per cent share in Globalstar; BT – with its 60 per cent owned mobile network Cellnet – has a 0.9 per cent, or 12m, stake in ICO; and Orange signed a service provider agreement with Iridium in March.
Vodafone has a dedicated team, called “Vodastar”, working on the service. In countries where Vodafone operates it will exclusively provide the Globalstar service. “We see the service as supplementary to ours in areas where cellular phones can’t be used,” says a Vodafone spokeswoman.
Y&R’s Costello says: “It is a challenge, there are so many things on the agenda and so many variables, but the benefits are there to deliver to customers.”