Harris, exactEarth Aim To Ride Iridium Next to Growth in AIS
PARIS — The partnership between exactEarth of Canada and Harris Corp. of the United States to place maritime data-collection payloads on 58 Iridium Next low-orbiting satellites is structured so that each company benefits from the other’s commercial success, according to exactEarth.
The companies on June 9 announced a strategic partnership in which Harris will use exactEarth-patented technology to mount maritime ship-monitoring payloads on 58 next-generation Iridium mobile communications satellites.
Harris and exactEarth will divide the cost of the payloads, to launch in 2016 and 2017, and will also divide the growing satellite-based Automatic Identification System (AIS) market. Melbourne, Florida-based Harris will have exclusive rights to the technology for the U.S. government market, while Cambridge, Ontario-based exactEarth will market to the rest of the world.
The contract also gives Harris immediate access to exactEarth’s current constellation of eight small low-orbiting AIS satellites, a fleet that will grow to 11 satellites in the next two years, to begin immediate sales to U.S. government customers.
Harris will assume the cost of integrating exactEarth’s technology into the Iridium Next payloads and operating them, but exactEarth has agreed to pay $10 million in what it called “commitment fees” between now and June 2016.
The Iridium-hosted payloads will be launched starting in early 2016. After they are fully deployed in low Earth orbit, exactEarth payments to Harris will total $3 million per year in operating-cost reimbursements.
During this initial period, Harris will have access to exactEarth’s own satellites to sell AIS data to the U.S. government. Harris has agreed to pay exactEarth 15 percent of its U.S. government revenues deriving from this early use of the exactEarth technology, a figure that rises to 50 percent in March 2016, or sooner if Harris passes $339,000 in revenue from the service, according to an exactEarth filing with the Toronto Stock Exchange.
Once the 58 Iridium Next payloads have reached initial operating capability status, Harris will pay 18 percent of the revenue it derives from U.S. government service sales.
In turn, exactEarth will pay Harris 40 percent of its annual revenue – global sales to all customer sets excluding the U.S. government – up to a ceiling of $40 million. Payments drop to 33 percent of revenue beyond $40 million.
Peter Mabson, exactEarth’s president, said that in addition to providing global coverage – and quicker data delivery from Iridium’s inter-satellite links — the Harris partnership gives exactEarth access to more than 100 VHF-frequency channels, compared to six that it had when exactEarth began its business. This additional frequency, he said, opens multiple new potential business lines for exactEarth beyond AIS.
For exactEarth, majority-owned by Com Dev of Canada, the link-up with Harris is an 11th-hour ticket — the deadline for adding hosted payloads to the Iridium Next constellation is fast approaching — to a capex holiday that could last more than a decade. Each Iridium Next satellite is built to operate for 15 years in low Earth orbit.
McLean, Virginia-based Iridium Communications has contracted with satellite manufacturer Thales Alenia Space of France and Italy, and Orbital ATK of Dulles, Virginia, to build and integrate 81 Iridium Next satellites.
Seventy-two of these satellites will be launched, with the nine spares available to replace retiring spacecraft or as backups in the event of a launch failure. The first two are scheduled for launch in October aboard a Russian-Ukrainian Dnepr rocket. Because of the late timing of the Harris-exactEarth agreement, neither of the initial Iridium Next satellites will be fitted with an AIS payload.
Mabson said AIS terminals likely will be aboard at least some of the first 10 Iridium Next satellites to be launched aboard a SpaceX Falcon 9 rocket, a launch scheduled for February. That launch will be the first of seven 10-satellite launches with SpaceX that Iridium has planned to deploy its constellation.
In a June 8 interview, Mabson said his company and Harris have been negotiating an agreement for about a year, and that placing hardware using exactEarth’s patented AIS message-detection algorithms on 58 satellites assures continues global coverage.
Iridium hired Harris to provide and market a module to host outside payloads on the Iridium Next satellite platform that serve as a supplemental source of revenue for Iridium. The modules also are hosting payloads for Iridium’s majority-owned Aireon air-traffic-monitoring service.
“We always knew we needed a U.S. partner to develop the U.S. government market for our service,” Mabson said. “Harris was the obvious choice given their relationship with Iridium and their experience in antenna design.”
Harris has said it has just about filled to capacity the hosted-payload space on Iridium Next constellation, although the company has not identified all the customers that have agreed to place instruments on the platform.
Orbcomm Inc. of Rochelle Park, New Jersey, is competing with exactEarth to develop the nascent satellite-based AIS market, whose growth has been spurred by maritime regulatory requirements that ships of a certain size carry AIS data transmission gear. Terrestrial AIS ship-to-shore signals have a limited range, leaving a market opening for a satellite-based alternative.
Orbcomm has begun offering its AIS service and is counting on Hawthorne, California-based SpaceX to launch 11 second-generation Orbcomm satellites, all with AIS terminals, by late September. One of Orbcomm’s early customers has been the U.S. Coast Guard, a customer that Harris will undoubtedly target.
Mabson has said in the past that the exactEarth algorithms’ competitive advantage is their ability to turn the mass of noise from hundreds of ships on heavily trafficked maritime routes — all broadcasting on the same frequency — into usable data on individual ships’ identity, cargo, location and heading.
Mabson said exactEarth is paying Harris a portion of the cost of building and integrating the AIS payloads into the Iridium Next satellites, plus a separate fee once the service is in operation.