Iridium, frustrated by Russian red tape, to launch first 10 Iridium Next satellites with SpaceX in July


PARIS—Mobile satellite services provider Iridium Communications on Feb. 25 said it has revamped the launch sequence for its 72-satellite Iridium Next constellation because of red tape in Russia and now plans a first launch of 10 satellites aboard a SpaceX rocket in July.

A second 10-satellite SpaceX launch would occur in October, with the five remaining launches occurring every 60 days thereafter, Iridium Chief Executive Matthew J. Desch said in a conference call with investors.

Desch said the Russian Ministry of Defense, which oversees all activities at the Yasny, Russia, spaceport, has not moved on a request from Dnepr rocket operator Kosmotras of Moscow to issue the required licenses.

Dnepr, a silo-launched converted ballistic missile, had been scheduled to launch the first two Iridium Next satellites in April. McLean, Virginia-based Iridium then would test them in orbit, validating their performance to itself and its insurance underwriters, before proceeding with seven SpaceX launches starting in August.

Desch said Hawthorne, California-based SpaceX has agreed to move up the Iridium launch by one month. A second flight in October would mean only three months, not four, to complete in-orbit testing, but Desch said the delays in the program so far have permitted prime contractor Thales Alenia Space of France and Italy to fully vet the hardware.

Desch said two Iridium Next satellites would be completed in March – these were to have launched on Dnepr – with 12 more in advanced stages of manufacturing by Thales Alenia Space. Desch said the defect in the satellites’ Ka-band modules, built by ViaSat Inc. of Carlsbad, California, and used to provide feeder links to Iridium ground stations, “appears to have been resolved,” and that overall satellite production will support the new schedule.

Desch said Iridium has been waiting for Russian license approval for months and has been told on multiple occasions that it’s about to arrive. But it has not been given yet and Iridium cannot take the risk of not having its full 72-satellite constellation in orbit by late 2017.

The Dnepr contract, he said, may be used midway through the constellation’s deployment sequence, or toward the end, he said.

Orbital ATK of Dulles, Virginia, is handling Iridium Next assembly, integration and testing at its Arizona facility and will be ready as of July to produce six satellites per month to meet the launch cadence, Desch said.

Iridium Chief Financial Officer Thomas J. Fitzpatrick said placing 10 satellites up first instead of two would cause the Iridium Next insurance premium to increase slightly but that it would remain within the $125 million previously estimated as a ceiling.

The seven SpaceX Falcon 9 Iridium Next launches will occur from Vandenberg Air Force Base, California.

Iridium’s current constellation is years past its scheduled retirement date, but Desch said the constellation’s performance in 2015, as measured by service availability, was better than it had been in years and continues good.

For the year ending Dec. 31, Iridium reported revenue of $411.2 million, up 1 percent from 2014. Operational EBITDA, or earnings before interest, taxes, depreciation and amortization, was 57 percent of revenue and was up 8 percent from 2014.

The company said it had 782,000 billable subscribers as of Dec. 31, flat from Sept. 30 but 6 percent above where the subscriber count stood a year ago. Fifty-one percent of the subscribers are machine-to-machine (M2M) customers, whose monthly payments are much less than what Iridium’s voice and data customers pay for the service.

The company said its commercial voice and data customers were paying $42 per month on average at the end of 2015, down from $43 a year ago. Part of the decline is due to foreign-exchange effects from the U.S. dollar’s rise on global markets.

Commercial M2M customers paid $14 per month, down from $16 a year ago, Iridium said.

The highlight of the year for Iridium was its government services business, most of which is managed through a five-year, fixed-price contract valued at $400 million. Government customers numbered 72,000 as of Dec. 31, up 14 percent from a year ago and 4 percent from Sept. 30.