— All six satellites launched in June for two-way messaging service provider Orbcomm Inc. have suffered attitude-control problems in orbit, raising questions about how effective they will be once they are integrated into the company’s current 27-satellite constellation, Ft. Lee, N.J.-based Orbcomm said in a Nov. 10 filing with the U.S. Securities and Exchange Commission (SEC).
The satellites have unexplained problems with their reaction wheels, which are needed to orient their antennas and solar arrays during routine operations. The spacecraft use platforms that were supplied by Polyot of Omsk, Russia, under a contract that was one of that company’s first commercial deals outside
In a Nov. 10 conference call with investors, Orbcomm Chief Executive Marc Eisenberg said the Automatic Identification Service (AIS) payloads on the satellites, which are being tested for the U.S. Coast Guard and seen as a major future growth opportunity for Orbcomm, have not been affected by the reaction-wheel issue.
Eisenberg said each satellite has five reaction wheels and needs only three to function normally. “We don’t anticipate losing any more wheels,” Eisenberg said.
In the SEC filing, Orbcomm said it is “unable to quantify the impact, if any, that these anomalies will have on the expected useful life” of the new satellites. “The satellite bus provider has informed the company that they expect to be able to resolve, or develop operational procedures to mitigate, the effect of these anomalies.”
already has sent up a software patch to reduce the effects of the reaction-wheel loss. Orbcomm said in its SEC filing that the exact cause of the problem has not yet been determined.
The six spacecraft still are being positioned to maximize their utility to the existing constellation, which dropped from 28 to 27 satellites recently when one spacecraft was taken out of service. The issue is mainly one of spacing each satellite relative to others in the same orbital plane for maximum global coverage.
reported revenue of $21.6 million for the nine months ending Sept. 30, up 10.6 percent from the same period a year earlier. Service revenue, which is where Orbcomm’s long-term future resides, was up 33 percent during the period, to nearly $17 million. The remaining revenue was from sales of hardware. The company’s net loss was $2.5 million, down from a net loss of $4.7 million a year earlier.
The number of billable subscriber units in use was 442,000 Sept. 30, only 5 percent more than June
what Eisenberg said was a disappointing performance. He said two Orbcomm equipment manufacturers had encountered technical issues unrelated to Orbcomm, and that these will take several months to resolve as the machinery equipped with the units is returned for scheduled maintenance.
has ordered 18 second-generation Orbcomm satellites from Sierra Nevada Corp. of
, under a $117 million contract that includes options for 30 more satellites to be priced at $5 million to $7.7 million apiece depending on the timing and size of the order.
Eisenberg said the first batch of second-generation satellites will be ready for launch in the third quarter of 2010, but that Orbcomm may delay the second-generation constellation depending on the health of Orbcomm’s market and its cash position.
Chief Financial Officer Robert Costantini said the company had $94.1 million in cash and restricted cash on hand as of Sept. 30, and has reported positive cash flow from operations so far this year. Orbcomm reported generating $4.6 million in net cash so far this year.
“We can launch in smaller groups [of satellites] or space out the launches,” Eisenberg said of the second-generation satellite constellation’s introduction. “We will take measures to protect cash if the [business] growth is not as brisk as we had hoped.”