Following In XM's Footsteps?
By Dan Beyers
XM Satellite Radio moved a step closer to the altar with Sirius this week, winning regulatory support for its merger from the chairman of the Federal Communications Commission.
That got us thinking about Washington's homegrown satellite community, and how many of the players have been showing new signs of life of late. One is a company called ICO Global Communications. We sat down with chief executive Tim Bryan recently to talk about his company's prospects. Bryan sounded like a man who was looking for his own match made in the heavens.
What XM did for radio, ICO wants to do for television, roadside assistance, and driving directions. In April, the company launched the nation's largest commercial satellite into orbit over North America, and a month later secured for itself a slice of the airwaves to send all sorts of multimedia back to Earth. The current business plan is to deliver eight to 10 premium television channels to your car, and mash that up with a roadside assistance package and a navigation system, all for a monthly subscription fee.
This would not just be any navigation system. ICO's system would not only tell you where to go but would do so by adopting an interactive wisdom of crowds approach, allowing drivers to create and join networks of other motorists to compare driving experiences -- sort of like a service called Dash.
At least, that's the pitch.
The satellite is being put through testing now. If all checks out, the company hopes to begin experimenting with the service in Las Vegas and North Carolina's Raleigh-Durham region.
I asked Bryan if there was really sufficient demand for live TV in the car (given the driver has to watch the road!). He said the steady growth rates for satellite TV in the home -- even with heightened competition from cable and telephone companies -- suggested there was a sustainable market. And company literature noted there's been a healthy uptake for mobile DVD players and automobile navigation systems in recent years. After all, Americans spend approximately 16.5 hours a week in their cars, or 540 hours per year.
But if ICO builds it, will they come?
Bryan said ICO has enough money on hand to prove mobile satellite television is feasible but not enough yet to get full-fledged consumer service off the ground, possibly by 2010. The company is busy making its case to investors, partners and others.
ICO established its headquarters out in Reston, near Nextel's offices, which might have something to do with the fact that several top executives hail from the push-to-talk wireless carrier, including Bryan, a former Nextel board member. The company employs about 50 people, 30 of which work in Northern Virginia.
ICO's chairman and biggest investor is cellular pioneer Craig McCaw, who also backs the high-speed wireless startup Clearwire (Clearwire and ICO are teaming up on ICO's pilot trials).
McCaw helped bring ICO out of bankruptcy after it ran into difficulties several years ago when it failed to launch a constellation of satellites to provide global telecommunications service. (The company is currently suing Boeing over its troubles).
In a meeting with investors earlier this month, Bryan was quite candid about assessing the company's "hits" and "misses." ICO put a satellite in the skies -- a hit -- but it is still searching for new strategic partners -- a miss. The company is keen on teaming up with the Comcasts or DirecTVs of the world or maybe a wireless operator, helping the established players round out their offerings and fill in gaps in their coverage areas.
When you have a bird in the air and you control spectrum, you own something of value, Bryan said.
"These are great foundational assets," Bryan said. "We can go it alone or we can get a partner."
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