Re: Prospects for Teledesic

Dr. Ernest N. Prabhakar (
Tue, 16 Jul 96 21:48:46 -0700

>BTW, I shudder to think that 'Netscape IPO' could define the Net
>era like 'IBM PC released' did.

Too late. Over here in the 'suit' world, Netscape's stock price is
the utlimate validation of the Net. Nobody seemed to care until then.
Makes me wonder what they'll do if it hits the basement.

>The barrier here was NOT hardware, or access to fiber, or developed
>infrastructure. It was the phone company bureaucracy:

That, I think, is the key issue with Teledesic. Well, one of two issues.

1) Can they build it on time and on budget?
2) Can it change the fundamental economics of Telecom.

Right now cellular is a special-charge on top of existing landlines,
at least in the US. I hear in Sweden young adults only own
cellulars, since they move around so much.

Teledesic has three possible business models, as Rohit implied.

1) It can be a super-cellular, a high-value high-priced service for a few.
which has serious problems of generating demand
2) It can be the slave of the Telcos, just another satellite link
replacing fiber or cable.
which means it will move as slowly as a Telco, making it
vulnerable to alternative, nimbler solutions
3) It can change the rules of the game.

That is the biggest challenge. It needs to cooperate with the
telcos without being coopted. Dance with the devil, but don't let
him take you home.

Sorry I don't have any more brilliant observations, despite Rohit's
hype. if I had any really smart ideas how to make Teledesic works, I
probably wouldn't be able to tell you anyway. :-)

-- Ernie Prabhakar