Iridium teams with SpaceX for new satellites launch

One of the “old” players among those trying to cover the whole world is Iridium. They have a functioning system but the company is trying to come with new technical solutions

Iridium announced in mid January the successful launch of its first ten Iridium NEXT satellites. The satellites were delivered into low-Earth orbit approximately one hour after the SpaceX Falcon 9 rocket lifted off from Vandenberg Air Force Base in California.

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Iridium NEXT is the company’s next-generation satellite constellation, replacing and enhancing its existing network of low-Earth orbit satellites spanning the entire globe — the largest commercial satellite constellation in space.

This is the start of a series of Iridium NEXT launches scheduled over the next 18 months, and marks the beginning of one of the biggest “tech refreshes” in history, completely replacing the only satellite constellation providing 100-percent truly global communications coverage.

Once fully deployed, Iridium NEXT will enable a new broadband multi-service capability called Iridium CertusSM, while providing the technical flexibility to support innovative new services and technologies from Iridium’s extensive partner network.

Among those technologies is a unique hosted payload from Iridium’s partner Aireon, which will provide a real-time global aircraft surveillance service, extending aircraft visibility across the planet.

Iridium and SpaceX are partnered for a series of seven launches, deploying ten Iridium NEXT satellites at a time. The next major milestone will be the completion of on-orbit testing of these satellites, to validate performance requirements are met.

The second Iridium NEXT launch will be scheduled after this testing is completed, in April. The entire Iridium NEXT network is scheduled to be completed by mid-2018.

Financial results

The latest financial results are for the third quarter of 2016. The revenue was $112.8 million, which consisted of $87.3 million of service revenue and $25.5 million of revenue related to equipment sales and engineering and support projects.  Total revenue increased 6% versus the comparable period of 2015, while service revenue grew by 8% from the year-ago period.

Service revenue, which represents primarily recurring revenue from Iridium’s growing subscriber base, was 77% of total revenue for the third quarter of 2016.

The Company ended the quarter with 838,000 total billable subscribers, which compares to 781,000 for the year-ago period and is up from 823,000 for the quarter ended June 30, 2016.  Total billable subscribers grew 7% year-over-year, driven by growth in government customers and machine-to-machine (“M2M”).

Commercial service remained the largest part of Iridium’s business, representing 58% of the Company’s total revenue during the third quarter.

The Company’s commercial customer base is diverse and includes markets such as maritime, aviation, oil and gas, mining, recreation, forestry, construction, transportation and emergency services.  These customers rely on Iridium’s products and services as critical to their daily operations and integral to their communications and business infrastructure.

Service — Government

Iridium’s voice and data solutions improve situational awareness for military personnel and track critical assets in tough environments around the globe, providing a unique value proposition that is not easily duplicated.

The Company operates through two Defense Information Systems Agency (“DISA”) contracts, which include a $400 million, five-year, fixed-price agreement for satellite communications services and a $38 million multi-year contract to support and maintain the Department of Defense’s (“DoD”) dedicated gateway.

  • Government service revenue was $22 million, a 22% increase from the prior-year period, driven by the Company’s airtime services contract with DISA.
  • Iridium’s government business ended the quarter with 82,000 subscribers, which compares to 69,000 for the year-ago period and is up from 80,000 for the quarter ended June 30, 2016.  Government voice and data subscribers increased from the year-ago period to 43,000 as of September 30, 2016.  M2M data subscribers increased 30% year-over-year and represented 48% of government subscribers, an increase from 43% at the end of the prior-year period.

Equipment

  • Equipment revenue was $19.9 million during the third quarter, compared to $21.2 million in the prior-year period.
  • The Company expects equipment revenue for full-year 2016 to be comparable to 2015 results.

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