After Failure, Orbcomm Touts Constellation Resiliency

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PARIS—Satellite machine-to-machine messaging service provider Orbcomm said it could lose several of its 17 second-generation satellites without a big impact on its operations beyond a slight delay in message-delivery times.

Orbcomm said it was nonetheless confident that the recent loss of one of the six second-generation satellites launched in July 2014 is unlikely to repeat.

In an Aug. 6 conference call with investors and a filing with the U.S. Securities and Exchange Commission (SEC), Rochelle Park, New Jersey-based Orbcomm said Sierra Nevada Corp. of Sparks, Nevada, the prime contractor for the second-generation constellation, has about completed work on the 11 remaining satellites, which will be placed into storage awaiting launch.

Orbcomm Chief Executive Marc J. Eisenberg said during the call that launch could occur “as early as November” aboard an improved-thrust Falcon 9 rocket operated by SpaceX of Hawthorne, California.

SpaceX is recovering from a June 28 launch failure and has not announced a return-to-flight schedule. Eisenberg said the 11 Orbcomm satellites will be launched aboard the second or third flight of the improved-thrust Falcon 9.

Before the SpaceX failure, the new-version Falcon 9 had been scheduled to make its inaugural flight before October, carrying a commercial geostationary telecommunications satellite owned by SES of Luxembourg.

Eisenberg said the satellite that stopped communicating in June had exhibited erratic behavior beforehand, requiring two software resets by ground teams and suffering two temporary communication outages before going silent.

None of the other five satellites has shown the same behavior, and while the satellite builders continue to examine what happened, Orbcomm has no reason to put the 11 remaining satellites back into the production facility, or to delay the launch, Eisenberg said.

The failure “is very likely a workmanship or piece part issue specific to this one satellite,” Eisenberg said. “We do not believe there is anything systemic on our new spacecraft.”

Eisenberg said failures should be expected on low-orbiting small satellites that, unlikely large geostationary spacecraft, dispense with multiple redundancies to permit a recovery in the event of a component failure. Orbcomm paid about $120 million for its 18 second-generation satellites.

The first of those satellites was lost in late 2012 after being placed into the wrong orbit by a SpaceX Falcon 9. Orbcomm filed a $10 million claim for the loss.

Orbcomm took a $12.7 non-chase charge against its earnings for the three months ending June 30 as a result of the more recent loss. The cause has not been determined by Sierra Nevada and satellite payload provider Boeing Co., but the loss presumed to be definitive, Orbcomm said.

Orbcomm had secured a satellite insurance policy covering both SpaceX launches of the full 17-satellite second-generation constellation. The policy includes a three-satellite deductible, meaning Orbcomm will not be able to file a claim for the loss.

Orbcomm Chief Financial Officer Robert G. Costantini said during the call that the company had recently purchased a one-year renewal of its in-orbit insurance for the five operational satellites, and that this policy – which overlaps the full-constellation policy – had a one-satellite deductible.

Eisenberg said the second-generation constellation was designed so that, with 17 operational satellites, Orbcomm subscribers — which totaled 1.297 million as of June 30, up 35,000 from three months earlier — would receive their messages within five minutes 90 percent of the time. If a satellite is lost, the five-minute reception time would be slightly longer, but there would be no overall loss of system capacity or revenue potential.

“If we were to go from 17 satellites to 16, to 15, to 14 it’s not going to have a huge impact on the business,” Eisenberg said. “Maybe latencies would creep up to seven or eight minutes, but we’ve been 98 percent within 15 minutes [with the first-generation constellation] for years.”