WIRELESS COMMUNICATIONS Round 2 Begins For Battered Satellite Phone Carriers.(A)

Byline: Peter Benesh

They're like a pair of bruised and bleeding bare-knucklers trying for the big comeback. In this corner, Iridium. In the farcorner, Globalstar. Analysts say both could get knocked out, or both could survive the slugfest.

In the early 1990s, the two firms set out to sell satellite telephone service on the assumption that a customer would want just one mobile phone thatcould be used anywhere. Another assumption: The customer would pay any price.

The sucker punch came from the cellular boom and cutthroat competition on long-distance charges. The two satellite mobile phone companies found themselves knocked out of the ring. Their prices were too high -- both for handsets and air time. They were billions of dollars in debt.

Iridium went bankrupt, to be reborn after a fire sale of its assets. Globalstar will probably do the same, analysts say.

The two systems have different technologies. Iridium's 66 satellites pass messages from one to the other in an orbiting network. It uses just one ground station, in Tempe, Ariz., to channel civilian traffic into the earth's telephone lines. The U.S. Department of Defense has its own Iridium-dedicated station in Hawaii.

Globalstar's 48 satellites do not talk to each other. They have to relay their messages back to expensive ground stations all over the planet. No groundstation, no coverage. Thus, Iridium Satellite LLC covers the entire globe, while Globalstar Telecommunications Ltd., based in San Jose, Calif., has empty spaces.