TerreStar To Offer Pocket-Size Satellite Handsets

Satellite phones are downsizing another notch taking them step further away from the era when they were the size of granite pavers.

Satellite startup TerreStar announced that it plans to market a pocket-sized smartphone when it debuts its combo terrestrial-satellite phone service in a few months.

Plans call for TerreStar service to combine terrestrial service from AT&T with TerreStar's satellite service, based on a $300 million orbiting satellite that will cover the U.S .and Canada, reaching as far as Puerto Rico and Hawaii.

The TerreStar phone includes some of the same silicon that is used in Apple's iPhone. AT&T has exclusive rights to market the iPhone in the U.S. so the TerreStar conceivably could have a future link to iPhone users. In the meantime, TerreStar needs to get its satellite successfully launched and tested before it formally launches its service.

Last October satellite company Iridium unveiled its Iridium 9555 handset, a radical departure from the "brick" satellite phones that have been a fixture for satellite service. Satellite services are generally still too expensive for common use by consumers, but as the prices drop the services could represent a solution for some rural citizens who currently can't get adequate cell service, and can't afford the expensive satellite offerings.

Satellite services are increasingly finding a valuable niche among public safety users. After many public safety agencies were caught unprepared by the Hurricane Katrina disaster in 2005, public safety officials noted that Iridium and Globalstar users functioned well after the hurricane hit.

Separately, Globalstar said Wednesday that it has completed a $738 million financing. In a statement, Globalstar's chairman and CEO Jay Munroe said: "We can now move forward and re-focus all of our collective energies on growing the market for our comprehensive lineup of mobile satellite solutions for enterprise and retail consumers."

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