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AT&T Plans Hybrid Satellite/Cellular Phone

9/30/2009 12:52:59 PM Eastern

Dallas - AT&T
will market a hybrid satellite/cellular smartphone beginning in the first
quarter of 2010 to corporations, government agencies and small businesses,
followed sometime later by a hybrid phone for consumers, the carrier announced.

An early version of TerreStar’s hybrid satellite/cellular smartphone

The 3G smartphone will send and receive calls via TerreStar's voice-and-data communications
satellite when terrestrial cellular coverage is unavailable in the United
States, Puerto Rico, the U.S. Virgin Islands and their territorial waters. The
phone will use the same phone number whether connected to AT&T's cellular
network or TerreStar's satellite, which launched
earlier this year.

"When cellular networks are unavailable, TerreStar's
satellite will act as a cell site in the sky to provide coverage to help users
stay connected," AT&T said. The phone and service are "well-suited for
government, energy, utility, transportation and maritime users" because it
provides "a critical communications back-up capability, important to public
safety agencies, first responders, emergency services and disaster recovery
groups."

The phone and service will be AT&T-branded and sold
initially to AT&T's "government,
enterprise and business customers via our sales team and co-sell solutions
partners," a spokeswoman said. "We are actively investigating what role our
indirect partners can help us play in the sales to these markets or potential
future consumer offerings."

The smartphone is TerreStar's Genus smartphone, based on a
reference design from engineering-design company Elektrobit.
Pricing wasn't released. The Windows Mobile Professional 6.5 smartphone is the industry's
first satellite/cellular smartphone and first satellite phone with an internal
antenna, Elektrobit said. The phone incorporates quadband GSM and 850/1,900MHz
W-CDMA/HSDPA to connect to cellular networks, and it uses 2.2GHz HSDPA to
communicate via IP to TerreStar's satellite, which provides service to the U.S.
and Canada. The phone also features 100MB of memory, Bluetooth, Wi-Fi, GPS and
USB in a 4.7-inch by 2.5-inch chassis that's 0.6 to 0.8 inches in depth.
Initial satellite data speeds are 160kbps down and 40kbps up.

The AT&T integrated cellular/satellite solution will
combine the satellite network-related charges on the customer's regular
wireless bill. AT&T's monthly invoice will include the customer's cellular
voice and data service charges, the satellite network access subscription
feature charge and the satellite voice and data roaming charges.

For its part, TerreStar is pursuing additional resellers for
its phone and satellite service. Early this year, the company said its business
model was to sell its IP-based satellite service on a wholesale basis to
companies that target vertical markets and business. TerreStar also said it
would target people in rural communities where cellular coverage is spotty and
outdoor adventurers. TerreStar has a roaming agreement with AT&T to offer terrestrial
cellular service through its resellers.

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