Westinghouse wins 1st satellite communications job

May 21, 1992|By Ted Shelsby | Ted Shelsby,Staff Writer

WASHINGTON -- The Westinghouse Electronic Systems Group in Linthicum moved into the satellite communications business yesterday when it won an $80 million contract to build phones and the ground station for a mobile communications system to serve all of North America.

The contract was awarded to the local systems group, primarily a defense contractor, by American Mobile Satellite Corp.

Washington-based American Mobile also announced the selection of General Dynamics Corp. to launch the first of three planned satellites for the communications project in the fourth quarter of 1994, when the service will begin. The General Dynamics contract was valued at $70 million.

The mobile satellite system is designed to provide service anywhere in North America, filling gaps in the cellular phone service, said Brian Pemberton, president of American Mobile, at a news conference yesterday at the National Press Club.

About 35 percent of the United States is covered by cellular service.

Earl Galleher, a spokesman at American Mobile, said the company would be teamed with cellular companies across the country.

The system will work something like this: When a motorist is within range of a cellular phone service, the call will go through as it does now. But when the caller is beyond the range of cellular service, the call will be routed through the satellite system and back to a ground station,where it will feed into the regular public phone system or to another cellular service.

The American Mobile system, which includes voice, fax and data transmission, could also be used to make calls to airplanes, trains and ships up to 200 miles offshore.

The company expects the mobile phone or data terminals to cost $1,800 to $2,500 and the service to cost $1.25 to $1.50 a minute.

Milton F. Borkowski, a Westinghouse vice president, said he expects the American Mobile system to have about 1.5 million customers by the end of the decade.

Work on the Westinghouse ground station is expected to begin this summer. The company has not picked a site but it said it would be in the Washington area, perhaps in the Maryland suburbs.

American Mobile's communications system is expected to cost about $500 million by the time it is in service. Mr. Pemberton predicted revenues of $600 million a year by the end of the decade.

About half of the financing has been lined up, he said. That includes what he called "vendor financing" from Westinghouse and General Dynamics for the amounts of their contracts with the company.

Mr. Borkowski said Westinghouse, although it has no equity interest in the project, has arranged a financing package to cover the costs. He declined to offer specifics of the package but said, "If we got a bank to come in and provide a loan, that would be a form of financing. If we got a vendor to wait for payment until revenues start flowing in, that would be another form of financing."

For its part of the project, Westinghouse has teamed with five partners including Digital Equipment Corp.'s Telecommunications Services Group in Lanham and Atlantic Research Corp. in Rockville.

American Mobile is not the only company planning a commercial mobile satellite communications system.

Motorola Inc. plans to have a system in service by 1997.

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