AT&T to sell satellite phone from TerreStar

The TerreStar Genus phone, due in the first quarter of next year, will have all the features of a standard "smart" phone, including a touch screen, "QWERTY" keyboard, and the ability to use AT&T's ground-based wireless network. But it also will be able to connect to a TerreStar satellite for service in parts of North America where the cellular network doesn't reach, or when cell towers have been knocked out by disasters like hurricanes.

Dallas-based AT&T plans to market the phone first to business and government customers, and later to consumers. AT&T didn't disclose the price of the phone or the service. TerreStar has said before that it expects satellite calls to cost less than the roughly $1 per minute charged by existing satphone services like Iridium and Globalstar. Their phones are bulkier and lack the smart-phone capabilities of TerreStar's device, but have wider coverage. Iridium covers the whole world.

To connect to TerreStar's satellite, the phone will need a clear view of the southern sky, which means it will be difficult to use indoors.

Reston, Va.-based TerreStar's shares jumped 61 cents, or 29 percent, to $2.74 in morning trading Wednesday. It has traded between 21 cents and $2.75 over the past 52 weeks.

A competitor, SkyTerra Communications Inc., plans to launch two satellites next year to support phones similar to TerreStar's.

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