Teledesic Corp. plans to offer interactive voice, data and video services worldwide by 2001.
But rather than feeling overpowered by the immensity of the enterprise, competitors feel reassured by the credibility of Craig McCaw and Microsoft Corp.'s Mr. Gates.
"This concept would've been visionary if it were proposed before Iridium," said John Windolph, Iridium's director of corporate communications. "It's a flattering endorsement of our already developed technology."
Iridium, a Motorola brainchild in development since 1987, plans to launch a commercial global satellite communications system by 1998.
There are several major differences between Teledesic and Iridium, however. Teledesic will use 840 satellites and cost $9 billion, while Iridium relies on only 66 satellites and will cost $3.4 billion.
"Basically, we're targeting our system to high-end cellular phone users-business people who travel around the world and can use our phone anywhere," said Mr. Windolph. "The approach that Teledesic is taking highlights the vast market for these services because it so closely mirrors what we are doing, except on a much broader scale."
The McCaw-Gates venture "reiterates the importance of wireless communications in the overall information superhighway system," said Shant Hovnanian, ceo of CellularVision of New York, which plans to offer wireless video services using the same 28-gigahertz frequency as Teledesic.