I am a student at the National War College in D.C. My class had a guest lecturer from Iridium who provided a brief on the system and its capabilities.
No additional chips required. It's all in the phone. We got to see photos of the hand held unit and its telescoping antenna. Looked good.
The system is designed to allow the operator to select the mode of operation. If in the city it can be used similar to a cellular phone. The operator selects the mode...cellular or satellite access. Cellular access via existing nodes makes it much more cost effective.
The same holds true when in foreign countries. the only difference is in some countries the cellular rates...roaming fees may be comparable to the satellite fees iridium charges. In this case the operator would determine the approximate cost of the call and select the method of operation. Unfortunately the phone is not smart enough to select the cheapest form of payment. This is the only draw back of the system I could see.
A couple of more launches and the satellite system will be 66% complete. More testing in April and June. System on line in September of 1998.
Iridium is landing some good contracts and building a solid customer base.
Think of the opportunities...merchant ships, iridium phones on commercial aircraft...engineers in the oil business in the field, executives on travel..who knows maybe even the government might be interested in the system.
Lots of possibilities and good upside potential for the stock.