Three Orbcomm OG2 satellites malfunctioning, fate to be determined

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WASHINGTON — Three satellites in Orbcomm’s recently launched fleet of low-Earth orbit satellites have ceased communicating, reducing the operator’s second-generation constellation by a third of its envisioned strength if not recovered.

Anomalies occurring almost once a month since April have sidelined the satellites one by one, but have not jeopardized service for customers relying on them to carry machine-to-machine and internet-of-things data, Marc Eisenberg, Orbcomm CEO told investors Aug. 3.

With only 12 of 18 satellites now operating as planned, Eisenberg said Orbcomm is planning a smaller batch of third-generation satellites coined OG3 that will serve as a gapfiller.

“There has been little effect on message delivery times, and no impact on message throughput and revenue,” Eisenberg said during the conference call. “We’ve established a comprehensive investigation team that includes independent consultants as well as Orbcomm engineering and OG2 contractors to determine root cause and associated corrective measures. Each satellite carries a book value of about $10 million, and our goal is to recover all three satellites.”

Orbcomm’s first OG2 satellite reentered the Earth’s atmosphere after a brief period in orbit caused by an underperformed SpaceX Falcon 9 launch in 2012 (one of the rocket’s nine Merlin first-stage engines ceased functioning prematurely, leaving the satellite in too low of an orbit). The next 17 satellites launched on two SpaceX Falcon 9s — six satellites in 2014 and 11 satellites in 2015, of which two more experienced anomalies and stopped working.

In an Aug. 3 filing to the U.S. Securities and Exchange Commission, Orbcomm said an OG2 satellite that had gone into a “safe mode” after a 2016 solar array anomaly went radio-silent this April.

“Our satellite engineering team has developed and uploaded new software designed to prevent a similar solar array anomaly from occurring on other OG2 satellites,” Orbcomm wrote.

But then in June 2017 another OG2 satellite stopped communicating, followed by another in July 2017. Sierra Nevada Corp. in Sparks, Nevada, was the prime contractor for the OG2 constellation.

“Each OG2 satellite has the capacity of over six OG1 satellites, and the resiliency of the entire constellation’s increased capacity enables us to reposition satellites in the event of these circumstances, which reduces the impact on network service,” Eisenberg said. “OG2 satellites process about 80 percent of the network’s message traffic, which now totals approximately 1.2 million messages per day. Overall our customers continue to be pleased with the network’s performance and quality of service.”

An Inmarsat solution?

Eisenberg said collaborating with London-based Inmarsat, a mobile satellite services operator Orbcomm tightened partnership with in 2013, has taken precedence over new satellites so that Orbcomm can invest more in user hardware, such as modems.

“As opposed to a backup plan being more satellites, the backup plan became an Inmarsat plan … we kind of moved into that and it became the OG3 plan where OG3 is this mix of the two constellations,” he said.

Orbcomm and Inmarsat have already been collaborating on customer equipment, with Inmarsat benefiting from LEO access to areas its geostationary satellites have difficulty reaching, and Orbcomm benefiting from the lower latency of Inmarsat’s constellation. In an Aug. 3 email to SpaceNews, Eisenberg said the gaps between passes from Orbcomm satellites creates latency measurable “in minutes,” but Orbcomm IsatData Pro terminals, which can connect to Inmarsat I-4 L-band satellites, have latencies of “about 15 seconds.”

Eisenberg told SpaceNews OG3 will likely be in a high-latitude orbital plane. During the investor call, he said OG3 will have “only a few satellites,” placed “in a polar orbit because it supplements Inmarsat and [OG2] satellites.”

Eisenberg said Orbcomm and Inmarsat have co-built a radio-frequency integrated circuit that Inmarsat is using for BGAN, or broadband global area network terminals, and Orbcomm is using for IsatData Pro. Initial shipments started during the fourth quarter of last year, he said.

Eisenberg said Orbcomm is not planning to file an insurance claim if the three faltering OG2 satellites are lost, because the satellites were covered for launch plus one year in orbit. A recent inquiry into additional coverage had too high of a deductible, he said, and wouldn’t help Orbcomm’s current situation.

“We wouldn’t have gotten a dime anyway, so it just wasn’t an insurance event,” he said.

Inthinc gives keys to vehicle market

Orbcomm says its June purchase of Inthinc, a vehicle telematics, fleet management and driver safety company in Salt Lake City, added $900,000 to revenue for the three weeks it contributed to the financial quarter ended June 30. Eisenberg said $700,000 of that was service revenue, and that Inthinc was limited by an inability to produce sufficient hardware for its customers. The company should add 4,000 subscribers in the next quarter and more than 13,000 by year’s end, he said.

“In our transportation business, many of our customers have demands for fleet-vehicle telematics products, and our strategy is to be a one-stop supplier for all transportation needs,” he said. “The acquisition of Inthinc, which we completed in June provides an excellent entry point into the vehicle fleet market, and helps fill the need in our product portfolio.”

Eisenberg said demand for its hardware products is at an all time high and climbing — Orbcomm shipped a record 69,000 devices this quarter, and could ship around 90,000 over the next three months. He said Orbcomm is working on over 140 new products, of which 20 or more should roll out between now and 2018.

Orbcomm generated $57 million in revenue, a 13.8 percent year over year increase, and gained 62,000 net subscribers. The company’s total billable subscriber count reached 1.83 million, up 10.8 percent from last year’s 1.65 million.