Marc Eisenberg

Chief Executive Officer, Orbcomm Inc.

Orbcomm Inc. is one of what used to be called the “little LEO” satellite operators, but Chief Executive Marc Eisenberg says these days the company is thinking big. The operator of a constellation of two-way messaging satellites is eyeing an expansion of its business into higher-bandwidth services, and perhaps voice as well, as it moves toward the launch of its second generation of low-orbit satellites.

Orbcomm’s current generation of satellites has a customer base that recently passed 420,000 – including those using both satellite and terrestrial links through Orbcomm’s partnerships with terrestrial cellular operators. Eisenberg said the company is sticking to its forecast and will surpass 500,000 customers this year.

In May, Orbcomm signed a contract for the construction of the first 18 of its second- generation satellites – average cost: $6.5 million per spacecraft – with an option for up to 30 more.

In June, Orbcomm launched six fresh spacecraft, including one for the U.S. Coast Guard to test a satellite-delivered Automatic Identification System (AIS) service to inform coastal authorities about traffic in or near territorial waters.

AIS is one of several markets in which Orbcomm is likely to see increased competition from other satellite operators in the coming years. The Ft. Lee, N.J.-based company is now in the comfortable position of having no immediate need to raise cash- a good thing given the credit market turmoil – to fund its capital commitments for the second generation. Eisenberg spoke with Space News staff writer Peter B. de Selding.

You launched six new satellites June 19. How are they doing?

The satellites are doing fine. The [Cosmos rocket] really nailed the launch. The satellites get released two at a time every 20 days after initial checkout by Polyot of Russia, the prime contractor for operational testing.

Once the first two are released they will be spaced out onto their orbital plane. We can turn on the payloads during this period, and we expect that all of them will be fully functional within 90 days.

The satellites include the Automatic Identification System payload to be used by the Coast Guard. Have you confirmed its performance?

We have turned on the U.S. Coast Guard payload for a small period of time and its performance, as the engineers say, is nominal. We have one U.S. Coast Guard satellite, which is very similar to the other five, and the AIS payload is on all six of the satellites we just launched.

You were late in getting these satellites launched and ran beyond the Coast Guard’s deadline, forcing an adjustment of the contract. Are relations with the Coast Guard now back on track?

We think they are. We think we did a good job of keeping the Coast Guard advised on what was happening with the satellites. This was a complex situation. I am not sure anyone working a commercial satellite project has had the complexity we had to deal with in terms of licensing and ITAR [International Traffic in Arms Regulations, the export-control regime].

Think of it: We had a payload on a Russian platform being integrated and tested in and then launched in , and we had to deal with multiple export and re-export issues. To my knowledge this is the first time something like this has been done on a commercial program.

What should users see in terms of service improvements once the new satellites are operational?

This is the most dramatic performance increase we have ever implemented, because these satellites will be put into the constellation’s A-plane, which since the constellation was first launched has transmitted at a lower power with a lower ground footprint. So the new satellites will correct that.

To give you an idea of what we are looking for, the constellation now has a 98 percent probability of delivering its message within 15 minutes. We expect to drop to four minutes with the new satellites.

How is the rest of the constellation performing?

Well beyond expectations. We had 30 satellites, then one was taken out of service in 2007. This satellite had a five- year design life and was launched in the late 1990s, so even here we had relatively good performance. The other satellites have a seven-year design life. All 29 are healthy and performing well.

Argon ST worked on loading new software onto the satellites and succeeded in speeding up the connections to and from Earth stations by adjusting the codes of the satellites’ digital signal processors.

Back to AIS: Com Dev of , which had bid to be a supplier of your second-generation constellation, now hopes to compete with you on AIS and says that globally, this application alone is $100 million a year. Do you buy those numbers?

It is very tough to put a number on this market, and we have been trying to do so for some time. This market is made one deal at a time. I’d be very curious to see how they came up with that. My board has been asking me to come up with a number myself.

Com Dev says it has compared satellite-AIS technologies, and the one it is developing with the Canadian government is superior. Your reaction?

To my knowledge, Orbcomm is the only company to have funded, built and launched a constellation able to receive AIS signals. Our competitors, whoever they are, may feel the need to justify one or another number. What I know is that AIS is going to be a very good business for us. Recall also that the Orbcomm world is not to do these things ourselves, to provide a service directly to customers. For AIS we expect to bring in other guys to sell the products.

Will AIS be fitted onto all your second-generation satellites?

It is in the design. I have an option to take it out if, for whatever reason, we determine that it is not the way to go. I have to make this decision within 120 days of the contract, so it’s coming up soon.

What do the early tests of the AIS payload suggest to you?

They suggest that this is a very powerful tool. We turned on the payload for 60 hours and detected 700,000 transmissions in that period – a bit more than three per second. And that’s just one satellite. We have six of them in an orbital plane that should be able to perform detection for 10-12 hours per day in near real time. You see the advantages of a big constellation, especially for security-related applications where near real time is important.

Your contract with a team made up of Sierra Nevada for 18 second-generation satellites – with an option for 30 more – took much longer than expected to conclude. Why?

Partly it was because we kept seeing new candidate contractors, and part of it was because our current constellation is performing so well we did not feel pressure to choose. That bought us some time. It’s the biggest decision the company will make over the next few years so we took the time we needed. If you look at the winning team – Sierra Nevada Corp., Microsat Systems, ITT Space Systems, Boeing Intelligence and Security Systems – this was not a group that was in it at the beginning of the bidding process. More recently we selected Argon ST Inc. to build the second-generation payloads.

You have established a relationship with cellular operators AT&T and T-Mobile for dual-mode service, using handsets that use the cellular networks and then shift to satellite when out of cell coverage. How far can you take this?

We are looking at new applications for this. We have done well in logistics markets with near real time, not necessarily real time. But there are businesses out there that we think we can attract with higher bandwidth data and a voice service.

Compare what we offer with some other satellite telephone and data services out there. A combined offer from T-Mobile and Orbcomm gives you a handset for less than $150 and services charges of $10 to $15 per month. People hear that and their jaws drop.