Orbcomm to SpaceX: Launch our Satellites Before October

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PARIS — Satellite machine-to-machine messaging provider Orbcomm Inc. on May 7 said it had secured a commitment from  SpaceX to launch 11 second-generation Orbcomm satellites between mid-August and late September.

The launch, from Cape Canaveral Air Force Station, Florida, will be the second or third flight using the full-thrust performance of the SpaceX Falcon 9 rocket’s first-stage engines.

The inaugural full-thrust flight is expected to occur earlier this summer, carrying a large telecommunications satellite owned by satellite fleet operator SES of Luxembourg into geostationary transfer orbit.

In a filing with the U.S. Securities and Exchange Commission (SEC), Rochelle Park, New Jersey-based Orbcomm said it fixed the new launch date with Hawthorne, California-based SpaceX on April 13 through an amendment to the existing contract.

The contract’s total value of $42.6 million remained unchanged.

In a May 7 conference call with investors, Orbcomm Chief Executive Marc J. Eisenberg said he is assuming a mid-August SpaceX flight. But that date appears optimistic given the demands on the SpaceX launch manifest, the usual time delays accompanying the use of an engine — even a well-tested one — in new ways, and spaceport availability constraints.

SpaceX is scheduled to launch a NASA space station cargo resupply mission in mid-June, also from the Florida spaceport. Next up is a launch from Vandenberg Air Force Base, California, of the Jason-3 ocean-monitoring satellite, a joint U.S.-European government ocean-altimetry mission.

Next up would be the first flight of the full-throttle Merlin 1D engine, carrying the 5,300-kilogram SES-9 satellite to geostationary transfer orbit.

SES officials told investors in an April 30 conference call that the SES-9 launch would occur some time between July and September. The company declined to be more specific than that.

During the Orbcomm conference call, Eisenberg said the 11-satellite Orbcomm payload might not be the first after the SES flight; there may be another launch in between the two. He said his estimate of an August launch assumes Falcon 9 launches every three weeks — a rhythm that Spacex has demonstrated, but not over a long series of campaigns.

Eisenberg said Sierra Nevada Corp. of Sparks, Nevada, the prime contractor for the second-generation Orbcomm satellites, had completed construction and testing of eight of the 11 satellites, with the final three to finish final testing in the coming weeks.

In its SEC filing, Orbcomm said it had purchased a $120 million insurance policy covering the satellites’ launch plus one year of in-orbit operations, and a separate $22 million policy covering just the launch.

The launch-only policy covers the period from rocket ignition to the satellites’ in-orbit separation.

The launch-plus-one-year policy is more complicated and is tied to an identical policy purchased for the July SpaceX launch of the first six second-generation Orbcomm satellites, a policy valued at $66 million.

The two policies combined, totaling $86 million, include a deductible permitting the loss of three satellites in orbit — during the first year of life — before a claim would be paid.

Orbcomm said it paid an 11.3 percent premium for the two-part policy covering the July launch, and 11.4 percent for the policy covering the next launch.

The launch of the six satellites in July enabled Orbcomm to fill a hole in its coverage and improve messaging throughput by 8 percent even though the spacecraft are visible to a given user only eight hours per day, Eisenberg said.

The company’s first-generation constellation is comprised of 24 satellites, plus one smaller spacecraft dedicated to providing Automatic Identification System (AIS) maritime vessel tracking services.

All 17 second-generation Orbcomm satellites are equipped with AIS terminals. Orbcomm expects to be better able to compete with exactEarth of Canada for the commercial AIS business once its full constellation is operational.

Eisenberg said the full 17-satellite constellation will improve AIS service by 24-hour coverage at 15-minute intervals, compared to the service now, with coverage just eight hours per day at 15-minute intervals.

The second-generation satellites include a reprogrammable payload, built by Argon ST of Fairfax, Virginia — a Boeing Co. subsidiary — that has substantially boosted message throughput. Despite being visible for just eight hours per day, the six satellites in service since late last year are now providing nearly 40 percent of Orbcomm’s total traffic, Eisenberg said.

The successful launch and in-orbit qualification of the 11 remaining satellites will allow Orbcomm “to embark on a decade-long capex holiday,” Orbcomm Chief Financial Officer Robert G. Costantini said during the call.

Capital expenditure is one thing, acquisitions is another. Orbcomm has been on a buying spree that has multiplied the company’s size, customer base and product portfolio.

The two recent acquisitions, of SkyWave Mobile Communications Inc, for $130.5 million, and InSync Software Inc. ($11.1 million) were big factors in Orbcomm’s 119 percent increase in revenue for the three months ending March 31, to $42.3 million. Adjusted EBITDA, or earnings before interest, taxes, depreciation and amortization, was up 149 percent, to $9 million.

Orbcomm’s subscriber count at March 31 was 1.26 million. Without the two new acquisitions, revenue would still have been up 30 percent, and subscriber could would have been just over 1 million, the company said.