Many companies have built successful businesses sending television programs, computer data, long-distance phone calls, and other information around the world via satellite. Satellites are able to send information to people across an entire continent and around the world. Orbiting high above Earth, a satellite can simultaneously send the same information to a vast number of users within its coverage area. In addition, satellites are not affected by geography or topography and can transmit information beyond the reach of ground-based antennas. This characteristic, in particular, attracted entrepreneurs eager to make a profit by using satellites to provide telephone service for people who live or work in remote locations or in developing nations that have underdeveloped terrestrial communications systems.

A Chinese Long March 2C rocket carrying two U.S.made Iridium satellites launches on March 26, 1998.

Failures in the Satellite Telephone Industry

But while some satellite systems have proven...