Artist's concept of Iridium Next satellite. Credit: Iridium

PARIS — Mobile satellite services provider Iridium Communications has until March 31 to notify ISC Kosmotras of Moscow on whether Iridium will be exercising options to launch more than once with the Russian-Ukrainian company, according to Iridium.

McLean, Va.-based Iridium is less than two years away from the first launch of its Iridium Next second-generation constellation of low-orbiting satellites. In a March 6 presentation to investors, Iridium Chief Executive Matthew J. Desch said prime contractor Thales Alenia Space of France and Italy is about two months ahead of schedule on the 81-satellite program, and that the first batch will be ready for launch in February 2015.

Most of the satellites, each weighing 800 kilograms and designed to operate in a 780-kilometer orbit, are scheduled for launch by Space Exploration Technologies Corp. (SpaceX) of Hawthorne, Calif.

Following a modification of the original SpaceX contract, Iridium is buying seven SpaceX Falcon 9 launches, each of which will carry 10 Iridium Next satellites, for $453.1 million. The launches are to occur in 2015 and 2016.

As of Dec. 31, Iridium had made $65.1 million in down payments to SpaceX, the company said in a March 5 filing with the U.S. Securities and Exchange Commission (SEC).

To reduce launch schedule risks, Iridium has decided that the Kosmotras-marketed Dnepr rocket will be the first to launch Iridium Next. Operated from Russia’s Baikonur Cosmodrome in Kazakhstan, Dnepr will launch two Iridium Next satellites at a time.

Iridium has agreed to pay $51.8 million for that single launch of two spacecraft, but the company has an option to purchase six Dnepr vehicles to put a total of 12 Iridium spacecraft into orbit, with a further option for six more launches.

If Iridium exercises the option for six launches, it will pay $184.3 million to Kosmotras. The options expire on March 31, Iridium said in its SEC filing. As of Dec. 31, the company said it had paid Kosmotras $11.2 million.

The Dnepr rocket, which is a silo-launched converted ballistic missile, has developed a solid reputation among Western government and commercial customers for its reliability. But in the past year or so, its availability on the market has come into question.

Russian industry officials have said disputes between Russian industrial and military officials about the price of a commercial launch, and who gets what share of the proceeds, have resulted in several launches being delayed.

Meanwhile, SpaceX has yet to field test the vehicle that will be launching Iridium. A first launch is scheduled by this summer. If successful, it will open the door to a sizable backlog of commercial launches for SpaceX, starting with a scheduled late-summer launch of a commercial telecommunications satellite owned by SES of Luxembourg.

“SpaceX has 28 launches before us,” Desch said during the March 6 presentation to an investor conference organized by investment adviser Raymond James, suggesting that any teething issues with the new Falcon 9 will be resolved long before Iridium’s satellites are launched.

In its SEC filing, Iridium said that while it is obliged to purchase launch insurance coverage under the terms of its credit facility, backed by the French export-credit agency, Coface, it will not be fully insuring all the launches. “We expect to self-insure the remaining portion,” the company said, without being more specific.

Iridium is counting on its majority-owned affiliate, Aireon LLC, a startup that will use Iridium Next satellites to provide aircraft location data to air navigation authorities, to pay Iridium $200 million in a one-time hosting fee to carry the Aireon payload aboard the Iridium Next constellation. That $200 million payment is expected between 2014 and 2017 and will help finance the $3 billion Iridium Next program.

Iridium’s current Aireon partner is Nav Canada, which in November agreed to purchase up to 51 percent of Aireon’s equity for $150 million. The money is to be paid in five tranches by 2017. The first tranche of $15 million, equivalent to a 5.1 percent equity stake, was paid in November. A second tranche of $40 million is due from Nav Canada in 2013.

Iridium’s current fleet of 66 operational satellites and five spares is “amazingly healthy,” Desch said, given that they were launched starting in 1998 for a manufacturer-promised seven-year service life. Having the constellation function through the in-service availability of Iridium Next is key to Iridium’s current Coface-guaranteed financing, and key to the company’s plans for a smooth transition for customers.

In its SEC filing, Iridium said not all 66 satellites are fully functional at any given time, and that individual component failures occasionally reduce coverage or transmission capacity.

Peter B. de Selding was the Paris Bureau Chief for SpaceNews.