Companies eyeing in-flight cellular, WiFi service

We have all seen this in our neighborhoods: A restaurant opens at the corner, and in a year closes its doors. Another restaurant opens its doors on the very same spot and is wildly successful. Is it the food? Service? Management? State of the economy? It is not always easy to tell. It may well be the same with offering phone connections to airline passengers. Boeing thought it was a natural candidate to offer such service and created Connexion from Boeing, but it could never make it work and last month gave up on the idea.

Now others are trying to succeed where Boeing has failed. Colorado-based AirCell expects to have a carrier operating with its service by late 2007. The company calculates that since there are about 11 million flights in the U.S. every year, with Americans making some 660 million trips a year, there must be a way to make money by letting these passengers talk while in flight. Glenn Fleishman says that if the company succeeds in signing up most of the major domestic airlines, and is able to cover the entire Western hemisphere, then it has the numbers to make it work. What is more, unlike Connexion, AirCell has no middleman to collect a fee for data transit, and it relies on a much cheaper antenna and ground station package with the spectrum it purchased. Fleishman also notes that the growing interest in intra-network media servers may play into AirCell's hands: The company may have only 1.5 Mbps to and from the ground, but it has 20 to 30 Mbps of throughput within the plane.

Note that the availability--and popularity--of the service will only grow as technical hurdles are overcome. It is already technically feasible to use one's cellular phone to make a call from an airliner, but there are problems: Airlines ban use of electronic devices below 10,000 feet; it is difficult to get a signal on a cell phone above 20,000 feet; and cellular coverage may be spotty or nonexistent over water or sparsely populated areas. The solution is pico cells, which we will discuss in a future issue.

For more on cellular, WiFi in-flight business
- see Chris Cobbs' Orlando Sentinel report [1] and Glenn Fleishman discussion [2]
For more on AirCell:
- see this Denver Business Journal report [3]