Iridium Next Deployment Delayed, Adding to SpaceX’s 2017 Backlog
PARIS — Mobile satellite services provider Iridium Communications has pushed back the inaugural launch of its second-generation constellation to October, saying payload-software issues need more time to validate.
McLean, Virginia-based Iridium said the four-month delay — which follows a three-month delay for different software concerns in mid-2014 — will have no effect on the in-service date for the 66-satellite Iridium Next constellation.
In a Feb. 26 conference call with investors and a subsequent interview, Iridium Chief Executive Matt Desch said the company has verified with its two launch service providers — Kosmotras of Moscow and SpaceX of Hawthorne, California — that both will be ready to launch on an accelerated schedule starting in October.
Iridium has booked one launch on Kosmotras’ Dnepr rocket, a converted ballistic missile using both Russian and Ukrainian technology whose schedule has been under question since Russia’s annexation of Crimea and military engagement in eastern Ukraine.
The Dnepr launch of two Iridium Next satellites appears firm for October, Desch said, despite the near-wartime relations between Ukraine and Russia.
SpaceX has been hired to provide seven launches, each carrying 10 Iridium Next satellites. Iridium and its insurance underwriters have agreed that Iridium will wait four months after the first two-satellite launch before starting the SpaceX campaigns to provide time to perform in-orbit validation of the satellite design and performance.
Thales Alenia Space of France and Italy is prime contractor for 81 Iridium Next satellites, with Dulles, Virginia-based Orbital ATK performing assembly, integration and test at its Chandler, Arizona plant.
Iridium Next is a $3 billion investment whose timing is considered important not only for the higher-speed services to be provided by the new satellites, but also because the current Iridium constellation is well past its scheduled retirement date.
Desch said the current constellation has one spare satellite remaining and suffered no satellite losses in the last three months of 2014, and none in the first two months of 2015. The Iridium Next constellation is scheduled to be in service by late 2017, a schedule that presumes seven successful SpaceX launches between March 2016 and late 2017.
Desch said SpaceX has completed development of the Iridium satellite dispenser, which will hold the 10 satellites in place during launch and then release them.
SpaceX has a large backlog of customers and continues to sign contracts for 2017 launches. But most of these are missions to launch from Cape Canaveral Air Force Station, Florida, whereas Iridium launches from Vandenberg Air Force Station, California. Desch said he asked pointed questions to SpaceX about manpower availability and the launch manifest and came away persuaded that the company would meet the late-2017 date for the seventh launch.
For the 12 months ending Dec. 31, Iridium reported revenue of $408.6 million, up 7 percent from 2013. Service revenue, the most important piece of the revenue line, grew 6 percent to $309.4 million. Iridium told investors its service revenue would grow by 10 percent, on average, through 2018.
A key element to Iridium’s growth has been the turnaround in the company’s OpenPort maritime service, which in 2013 suffered a hardware glitch that cost Iridium in warranty charges and lost customers and gave competitor Inmarsat of London a competitive weapon.
With the hardware defect fixed, OpenPort was a turnaround story for Iridium in 2014, with service revenue up 12 percent and the subscriber count up 20 percent.
Desch said that while Inmarsat remains a competitor in the market for L-band frequency distribution of services, Inmarsat’s new Ka-band Global Xpress is not a competitive threat to Iridium as much as it is to operators of Ku-band satellites selling high-speed service to the maritime market.
As has been the case for many companies doing business in Russia, Iridium’s Russian revenue dropped sharply in 2014 as the company bills in Russian rubles, which have dropped sharply against the U.S. dollar.
Iridium Chief Financial Officer Thomas J. Fitzpatrick said Russian customers’ prepaid Iridium phone cards are purchased in rubles, and that the company now expects 2015 revenue from Russia to be down by around $3 million as these cards were purchased in higher-value rubles but revenue from them will be booked in lower-value rubles as the usage occurs over the coming months.