Iridium in talks to launch more backup satellites this year

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TAMPA, Fla. — Iridium expects to take advantage of a rideshare opportunity this year to launch up to five of the six spare satellites it has been storing in Arizona.

The satellite operator expects to make a formal announcement about the potential $35 million launch deal in “the next couple weeks,” company spokesperson Jordan Hassin said.

Matt Desch, Iridium’s CEO, first disclosed plans to deploy ground spares in the company’s April 19 earnings call for the first quarter of 2022.

“I want to be clear that we do not have an immediate need to launch these satellites,” Desch said.

“Our constellation is very healthy and is performing well, but our ground spares have little utility just sitting in storage.”

The company had been waiting for a cost-effective opportunity to launch its remaining spares, according to Desch, who noted they have been racking up battery, solar array and other maintenance costs.

Extra in-orbit spares add more network redundancy, and effectively extend the constellation’s operational life because each satellite is designed to operate for at least 15 years. 

SpaceX, which launched all 75 satellites for the operator’s $3 billion Iridium Next second-generation constellation, lofted its latest batch of 10 satellites in early 2019 from Vandenberg Air Force Base in California.

Using Falcon 9 rockets, SpaceX had typically deployed 10 Iridium Next satellites with each launch mission.

Europe’s Thales Alenia Space built the constellation but subcontracted Northrop Grumman to integrate the satellites at facilities in the United States, where the ground spares are kept.

If Iridium chooses a SpaceX rideshare mission, it will likely again use trucks to transport satellites on their 550-mile journey from Arizona to California, avoiding aircraft shortages that mainly affect larger spacecraft destined for geostationary orbit.

Desch declined to give an update on the constellation’s projected operational life after an analyst asked if launching most of its ground spares meant it still planned to refresh Iridium Next around 2035.

Keeping up with demand

Iridium reported a 15% increase in revenue to $168.2 million for the first three months of 2022, compared with the same period last year.

Desch said sales were driven by connectivity markets recovering from the pandemic and “tremendous demand” in Ukraine following Russia’s Feb. 24 invasion.

“Our service is being used extensively” in Ukraine, he said, and “many thousands of handsets, and [Internet of Things (IoT)] and other devices have gone in from our partners,” adding that the company has “been stretched in terms of supply to meet all that” demand.

Globally, he said Iridium generated a record $42.1 million of revenue related to equipment sales and engineering and support projects in the first quarter.

However, the company hit a wall as demand exceeded forecasts while it works to build up an inventory for most of its products. 

Iridium reported 50,000 commercial IoT activations in the first quarter of 2022, and Desch said this “could have been even higher if we could have shipped more equipment.”

“This is a high-quality problem to have even though frustrating,” he said. 

“We have the business and could ship even more units if our parts supplier could meet our growing needs. Even as we’ve been pretty successful working [through] supply chain issues, we’re also finding new challenges in the current environment, like expanding our team to address our growing set of business opportunities.”

Future opportunities 

Iridium’s bid to operate a planned LEO constellation for the Department of Defense’s Space Development Agency (SDA) is one of these business opportunities.

Desch said he expects the U.S. government will award a contract to operate the constellation this year, after selecting manufacturers Feb. 28 to build satellites for the Transport Layer Tranche 1.

One of those manufacturers is Northrop Grumman, which highlighted its work to integrate and test Iridium Next satellites when it announced its share of the contract.

“I think there’s a lot of confidence among the government that [the constellation is] going to be a network that will be increasingly relied upon,” Desch said.

“So it’s one of the reasons why we’ve chosen to sort of step out of what we normally do to go after supporting and running and operating their LEO network in addition to the … experience we’ve had running our own.”

Longer-term, Iridium sees an opportunity to place its satellite chips in smartphones to enable them to tap into its L-band network.

Rumors circulated last year that Apple was planning to release iPhones that could connect to Iridium rival Globalstar’s satellite network.

Those rumors got another boost when Globalstar said Feb. 24 that an undisclosed customer was helping to fund plans to replenish its constellation

But while incoming wireless standards will support 5G directly from space, Desch said they are “years away from implementation and no one’s really committed to implementing them yet. 

“So I think that’s a longer-term trend that will happen in the industry that we obviously will keep track of, and consider how we might evolve to it,” he said.