Satellite phones – one of the least successful product introductions of the late 1990s – are in fresh demand in the wake of Hurricane Katrina from storm-ravaged communities without functioning cellular and wire-line networks.
But while sales are up sharply in recent days, retailers say it remains difficult to get handsets where they're needed.
"The infrastructure is so destroyed over so much area that physically getting the phones and communicating with people who need them has been a real challenge," said Weldon Knape, chief executive of World Communication Center, an Arizona satellite communications retailer.
To reach emergency workers in coastal Mississippi, the firm is shipping handsets to Mobile, Alabama, Knape said.
But the problems of shipping aren't reducing demand. At midday Tuesday, Knape estimated that within a couple of hours, he'd sell out of even the oldest inventory – a stockpile of clunky, first-generation Iridium phones manufactured by Kyocera in the late 1990s.
Satellite phones, which transmit calls through networks of low-earth-orbiting satellites, have been popular among emergency responders for years, but never took off with the general public following their introduction in the late 1990s. While the phones are technically capable of transmitting calls anywhere on earth, they have the drawback of not working inside buildings and being much heavier and more expensive than cell phones. In emergencies, however, they're extremely handy.
"Certainly right when a disaster happens, if you want to make a call within a few hours, without a satellite phone, you're pretty much out of luck," said Dave Mock, a wireless industry expert and vice president at Instream Partners, an investment banking firm.
Typically, cell-phone providers are able to roll out temporary networks fairly quickly after disaster strikes, but the scale of Katrina's devastation promises to make service restoration much slower than usual.
Two firms – Iridium and Globalstar – dominate the satellite-phone market, and both have reported a spike in usage following the hurricane.
Within the first week of the disaster, Globalstar said it, along with its dealers and clients, deployed more than 10,000 phones to the Gulf coast region. The company estimates that more than 15 times the normal volume of equipment is currently being put to use, mostly by emergency-response agencies.
Iridium estimated that usage levels were 30 times higher than normal in the Gulf Coast region over the past week.
At the same, new subscribers signed on at a rate five times higher than usual. To keep up with demand, Iridium's handset manufacturer, Celestica, is revving its production line to run 24/7, according to Liz DeCastro, an Iridium spokeswoman.
But Jeff Kagan, a telecom industry analyst, didn't expect many consumers will be snapping up satellite phones to prepare for emergencies.
Cost is a key deterrent for most consumers. Newer satellite phones commonly sell for $1,000 to $1,500 dollars. Monthly calling plans aren't cheap either. Iridium subscribers typically pay between $1 and $1.50 a minute for air time. Globalstar's monthly rate plans range from $50 for 50 minutes to $550 for 4,000 minutes of air time.
Today, the biggest users of satellite phones are government agencies, the military and industries like aviation and shipping where workers are out of reach of mobile phone networks.
Even without the rise in sales following Hurricane Katrina, government and industry demand appears to be keeping phone firms afloat.
Globalstar said it had more than 150,000 subscribers at the end of July. Iridium, bought by a group of private investors after filing for bankruptcy several years ago, said it is now profitable and is considering a public offering of stock.
