Satellite Business Systems
| Industry | Satellite communication |
|---|---|
| Founded | December 15, 1975 |
| Headquarters | McLean, Virginia, USA |
| Owner | IBM, Aetna and COMSAT |
Satellite Business Systems, abbreviated as SBS, was a company founded by IBM, Aetna, COMSAT (and later wholly purchased by IBM and then subsequently sold to MCI), that provided private professional satellite communications through its SBS fleet of FSS geosynchronous satellites, and was the first company to do so.
SBS was founded on December 15, 1975 by the aforementioned companies with the goal of providing a digital satellite communications network for business and other professional clients.
In late 1970, MCI Communications created a subsidiary company named MCI Satellite, Inc. The idea was that satellites could provide 'long distance' service from anywhere to anywhere without having to build thousands of miles of terrestrial network facilities. In early 1971, MCI and Lockheed Missiles and Space Company created a joint venture named MCI Lockheed Satellite Corp. which was the first company to request FCC authorization as a Specialized Common Carrier using satellite based communications. A year later, MCI and Lockheed sought an additional source of funding and Comsat Corp. entered the venture which was renamed CML Satellite Corp. In need of cash, MCI sold its share of the venture to IBM Corporation in 1974 (Lockheed also subsequently sold its share to IBM). IBM and Comsat brought in Aetna Insurance Company as a third partner and renamed the company Satellite Business Systems (SBS).
The original concept was for a large corporation to install SBS earth stations at each of its major sites. This strategy limited SBS' addressable market to corporations with enough concentrated voice and data traffic to justify the installation of multiple earth stations. Earth stations were generally not shared by SBS customers.
Although the SBS technology provided switched digital, leased digital, switched analog, and leased analog connections between a customer's earth stations, most customers used it mainly for intra-corporate voice calls. Data of the period were not efficient over satellite links.
One SBS customer, ISACOMM, extended the business model to smaller corporate customers and provided offnet connectivity as well.
The high initial costs of deploying earth stations, along with the rapid success and expansion of terrestrial competitors like MCI and Sprint, prevented SBS from attaining its commercial targets. Excess transponders on SBS satellites were leased to other companies, and SBS adopted some of ISACOMM's marketing tactics and even pursued the consumer long-distance market on a limited basis.
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