06.29.26
RocketLab flips the table…
Today’s announcement that RocketLab is acquiring Iridium represents a bolt from the blue, not because Iridium is being sold (which had been the subject of speculation for several months), but because RocketLab was the winning bidder. Previous speculation had focused on AST (which RocketLab outbid, much to Iridium’s relief), Viasat and even Amazon (though the value of putting together Globalstar and Iridium’s spectrum was always questionable because it would require completely redesigning Iridium’s existing terminals and satellites).
RocketLab was expected to be an anchor partner in the Equatys joint venture, as I noted back in March, contributing up to $1B of funding in exchange for a contract to build the Equatys satellite buses and launch the satellites. Now RocketLab gets to control its own destiny rather than being under Viasat’s thumb, and instead of competing head-to-head with SpaceX in the D2D market, can focus on what RocketLab and Iridium both perceive to be more promising and protected markets, such as aviation safety and PNT. That’s very clear when the investor presentation emphasizes that Iridium “delivers real time, pole-to-pole global coverage over every ocean, mountain and airway” and builds on Iridium’s recent acquisition of Aireon. Iridium has sold connectivity to the DoD for the last 25 years and is also playing a significant role in support of the Space Force’s PLEO efforts. And if it turns out there is a niche role for a D2D IoT offering, independent of Starlink, then Iridium can support that too.
Now the question is whether Viasat can replace both RocketLab’s bus and launch capabilities, and more importantly its money, to finally get the Equatys venture off the ground. RocketLab’s defection explains why no announcement was made in conjunction with Viasat’s results earlier this month, but this must have been a big shock, given how Space42′s CEO was all but confirming RocketLab’s participation in the joint venture at the Satellite show. It’s hard to imagine that alternative satellite vendors such as MDA would want to simply supply Viasat with buses, or make a substantial financial investment in the venture, or that other startup bus providers would have the money to participate either.
Alternatively, will Viasat have to come to the table with AST and figure out a way to jointly make use of the L-band spectrum? Is that even possible, given that both companies believe their own technical solutions are far superior to the other’s offerings? Does Viasat simply continue what Inmarsat did with LightSquared/Ligado for the last nearly 20 years, and agree to lease more (global) spectrum to AST while taking the view that it will get that spectrum back when AST eventually fails to deliver a viable system? Or will Viasat’s shareholders push for the company to follow Iridium’s path and sell itself to AST? If so they would undoubtedly want many billions of dollars in cash, not just AST shares. It is going to be a long hot summer…
