Space: The final frontier for cellphones?

LAS VEGAS -- The vast, thinly populated expanses of the country that still lack cellphone coverage could be getting an interesting option next year: ordinary-looking cellphones that connect to a satellite when there's no cell tower around.

In June, a rocket is scheduled to lift the largest commercial satellite yet into space. In orbit 22,000 miles above the Earth, the satellite will unfurl an umbrella of gold mesh 60 feet across and aim it at the U.S. That gigantic antenna will let the satellite pick up signals from phones that are not much larger than regular cellphones.

That satellite, from TerreStar Corp., is due to be followed by two similar, even larger ones from SkyTerra Communications Inc. next year. SkyTerra puts the cost of its satellites at $1.2 billion.

On the face of it, these are bold moves, especially considering that the satellite phone business has been troubled. Most famously, two companies with grand projects for worldwide satellite phone coverage, Iridium and Globalstar, filed for bankruptcy at the beginning of the decade, wiping out billions in investor capital.

But the background to the new launches is more complicated, and analysts say the business models of TerreStar and SkyTerra ultimately might rely more on the companies becoming acquisition targets for conventional wireless carriers.

There's plenty of competition in satellite phones, even though it's a niche market. Iridium and Globalstar are still in operation, providing last-resort communications for the military, forest wardens and others who can afford to buy dedicated, bulky satellite handsets for $1,000 and up. Inmarsat offers a third alternative.

Even so, SkyTerra and TerreStar say their new satellites, combined with advances in chip technology, can take "satphones" into the mainstream — devices you'd buy in an AT&T store.

The ability to call via satellite will be marketed as "an insurance policy or peace-of-mind feature," said SkyTerra spokesman Tom Surface.

The first handsets for TerreStar's satellite would cost about $700, said TerreStar chief executive Jeff Epstein. At a cellphone trade show here last week, the company displayed a prototype built by small Finnish company, Elektrobit. The phone has a QWERTY keyboard and runs Windows Mobile software, making it similar to many BlackBerry-style, e-mail-oriented phones for corporate use, but a bit thicker. Unlike Iridium and Globalstar phones, there's no protruding antenna.