PARIS — Satellite machine-to-machine (M2M) messaging provider Orbcomm Inc. on Nov. 5 said it remained cautiously optimistic that launch service provider SpaceX will return to flight in December with a new-version Falcon 9 by launching 11 Orbcomm second-generation satellites.
The launch will complete Rochelle Park, New Jersey-based Orbcomm’s second-generation constellation after the six satellites launched aboard Falcon 9 in July 2014.
Orbcomm had expected to be second or third on the flight manifest following Hawthorne, California-based SpaceX’s June launch failure. But in October, Orbcomm, SpaceX and SpaceX’s putative return-to-flight customer, fleet operator SES of Luxembourg, agreed to switch the two launches’ order to allow SpaceX to test reignition of the upgraded Falcon 9’s second-stage engine.
Orbcomm’s satellites will be dropped off at about 600 kilometers in altitude some 14 minutes after the Falcon 9 lifts off, after a single burn of the second-stage engine. The second stage then will test a 20-minute coast and reignition, which will be required to launch heavy satellites, like SES’s, into geostationary transfer orbit.
The 11-satellite Orbcomm payload, including the satellite dispenser, is about one-half the weight of a single large telecommunications satellite headed to geostationary orbit.
The new-version Falcon 9 has more-powerful first- and second-stage engines.
In a conference call with investors, Orbcomm Chief Executive Marc J. Eisenberg said he expected the launch to occur in the first half of December. “While there is still some work to be done, primarily on the SpaceX side, December is achievable as long as their preparation continues to go well,” he said.
One of the most immediate effects of placing into service the full second-generation Orbcomm constellation will be filling what Eisenberg called “a hole in the sky” that has caused service delays for some customers.
In particular, subscribers to Orbcomm’s Automatic Information System marine vessel tracking service will see increased flyovers of a given sea lane, to 135 flights per day, with AIS data refresh rates increased to once every 15 minutes, Eisenberg said.
Increased visibility of ships means more AIS revenue. Orbcomm has said its current annualized $5.6 million in AIS revenue will be growing to $10 million to $15 million over time once all 17 second-generation satellites are in service starting in 2016. The company reported that AIS-based revenue for the three months ending Sept. 30 was $1.4 million.
AIS is a side business for Orbcomm, whose focus is to sell service and hardware related to tracking commercial assets on land and sea. Eisenberg said the company would be using its technology to track the arrival, by road, of the 11 remaining satellites as they leave the Nevada facility of builder Sierra Nevada Corp. and head to the launch base at Cape Canaveral Air Force Station, Florida.
Orbcomm has been growing its asset-tracking business rapidly in part due to acquisitions as it seeks scale in an exploding M2M market in which new competition appears regularly.
Eisenberg said Orbcomm has some 40 patents covering different aspects of cargo monitoring by satellite and asset monitoring that should provide protection against incursions by new competitors.
“We’ve had three or four occasions where we thought there were patent violations,” Eisenberg said. “We’ve been pretty successful in defending our patents.”
Helped by two acquisitions that closed early this year, Orbcomm reported huge increases in revenue, gross profit and net income. Stripping away the effects of the new purchases, the company grew its organic revenue by 33 percent in the three months ending Sept. 30.
Orbcomm Chief Financial Officer Robert G. Costantini said during the call that Orbcomm expects to spend $40 million at the end of this year in costs related to the delivery, launch and insurance of the 11 satellites, but will still report free cash flow in its fourth-quarter results.
Once this spending is completed and the satellites are in orbit, Orbcomm will begin a capex holiday that will allow it to focus on growing the business, Costantini said.
As he has in the past, Eisenberg told investors that the M2M business is growing so fast that the opportunities for investment are too many to count. With some of the biggest names in commercial rail, road and maritime transport now adopting satellite M2M — from Orbcomm and others — he said no commercial shipper of goods would be able to do without the service.
