Orbital Pays Iridium $10 Million for Hosted Payload Rights

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PARIS — Orbital Sciences Corp. will find customers to fly piggyback payloads on Iridium Communications’ Iridium Next low-orbiting satellite constellation and has agreed to pay a nonrefundable $10 million this year to reserve up to 20 percent of Iridium’s hosted-payload capacity, Orbital and Iridium announced Feb. 3.

Under the agreement, Dulles, Va.-based Orbital, which recently won a $150 million contract to assemble, integrate and test the 81 Iridium Next satellites, will be in charge of the customers — mainly government agencies — it finds that are willing to place their own sensors on all or part of Iridium’s fleet.


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If Orbital confirms that the pent-up demand for such a service is large, it will sign a follow-up contract with Iridium that Iridium estimates could bring it $100 million over the 15-year life of the Iridium Next satellites, which are scheduled to be ready for launch starting in 2014.

Cannes, France-based Thales Alenia Space is prime contractor for the Iridium Next constellation and is designing each satellite so that a certain amount of space and power are reserved for late-arriving hosted payloads. Iridium had insisted that a U.S. company perform the satellites’ final assembly in anticipation of possible U.S. military or intelligence-service interest in placing sensors on the Iridium satellites.

These agencies would be less likely to move forward if the satellites were being integrated in Europe.

Iridium has estimated that selling space aboard its satellites for missions that have nothing to do with Iridium’s core mobile-communications business could generate between $200 million and $300 million.

Orbital’s $10 million deposit, to be made in a series of payments in 2011, gives it the right of first refusal on 20 percent of the hosted-payload capacity on the Iridium fleet.

Orbital spokesman Barron Beneski said Orbital, whose principal customers include numerous U.S. civil, military and intelligence agencies, “has a pretty good idea of what the mission challenges are” for government departments now being asked to reduce their budgets.

“We want to stake out a position as a leader in hosted payloads,” Beneski said. “Iridium is the wholesaler, we are the retailer.”

While some of the details of the relationship remain open pending a final contract, Beneski said Orbital will be in charge of relations with the hosted-payload customers, agreeing on the price of the payload hardware, on its integration onto the Iridium satellites, and on the annual operating charges.

“We have considerable experience with hosted payloads, most recently with the Commercially Hosted Infrared Payload Flight Demonstration Program (CHIRP), and understand the importance of balancing host schedules with customer requirements,” Orbital Senior Vice President Michael Hamel said in a Feb. 3 statement.