Two mobile satellite communications companies plan to launch competing billion-dollar satellites that might reinvigorate the market for satellite-linked mobile phones in 2009, according to the Associated Press.

TerraStar Corp. and SkyTerra Communications will launch a total of three of the largest commercial satellites in history into space this summer, their 60-foot gold mesh receptors aimed squarely at the U.S. The result: sat-link phones that won't be much larger than traditional mobile phones, complete with 3G radios. When the phones are within range of cell towers, they connect with normal wireless technology; when they're out of range, they contact the satellites for a connection.

In the past, satellite phone-makers lagged in development because of the unwieldy size and excessive cost of their devices, and the substantial overhead involved in satellite network upkeep. But the days of $1,000 satellite phones, once the province of military operatives and contractors in extreme conditions, may be giving way to a new era of universal devices. An example: TerreStar's first prototype handset, that runs Windows Mobile, boasts a QWERTY keypad, has a built-in antenna and costs $700. And, TerreStar has a roaming agreement with AT&T for non-satellite calls.

For now, this generation of satellite phones will work only within a line of sight of their satellites--which is to say, only in North America. But should these two companies launch more satellites for worldwide coverage, their devices could see more mainstream adoption. What's more likely: acquisition by a major telecom looking for the final trump card in coverage area.