New AT&T satellite phone will keep you connected when the network's gone

AT&T will launch a 3G cellphone that also connects to a new satellite phone network by the end of this year. Why this satellite phone will succeed where others have failed remains to be seen.

A company called TerreStar is launching its initial telecom satellite in the next month or so, which will cover the U.S., Canada, Alaska, Hawaii, Puerto Rico and the U.S. Virgin Islands. It'll be aimed at outdoors types and mariners. Good thing it doesn't cover Mexico, or the drug cartels would have been their best customers (although who knows how much coverage will extend over the border?). When TerreStar launches a second satellite, TerreStar is hoping to interest the government in its service. There aren't any plans to provide global coverage, which may limit its appeal.

The handset is a Windows Mobile 6.1 BlackBerry-type slab with a 2.6-inch touchscreen. Its only a bit thicker than most other slab phones and has no external antenna of any kind, all of which makes this the smallest satellite phone I've seen. Its compactness may make it more salable than previous satellite phones.

The phone, which doesn't have a name or a model number yet, will sell for around $700 to $800 unsubsidized. For satellite calls, expect around 1.5 hours talk time and glacially slow GPRS-like data speeds. Since the satellite hasn't launched yet, I have no idea how it sounds, but the tech guys assure me that since it operates on an IP backbone that you'll get VoIP-like voice quality.