02.12.09

Where was NORAD when it was needed?

Posted in Iridium at 2:57 pm by timfarrar

So now the unthinkable has happened, and two satellites have collided in orbit, despite the fact that NORAD is supposed to be tracking “more than 10,000 pieces of high-speed debris, some no larger than a football” and warning of potential collisions. Indeed to our knowledge, Iridium satellites have been moved in the past to avoid possible near-misses with debris.

As we said in the WSJ interview, the Pentagon are going to face a barrage of questions about exactly why there was no warning given about a possible collision: though you can’t predict that two satellites will definitely hit one another, unless Iridium had been maneuvering its satellite (which does not appear to be the case) it is easy to calculate when they may come within a few miles of one another a minimum of several days in advance.

Fortunately for Iridium, the disruption is reduced by the availability of in-orbit spares, and the fact that the satellite is only one out of 66 providing coverage, so there will just be a hole passing over any point on the Earth’s surface twice a day for 5-9 minutes (less at higher latitudes). Its a lot better than the failure of a GEO spacecraft which could eliminate service for months (or even years) across a large part of the globe, while a spare satellite is built and launched to replace it.

The main worry now is about how far the debris cloud will spread, and whether it will affect other Iridium satellites at that altitude, or even other satellites in nearby orbits. The closest commercial sytem is Orbcomm (only about 10km away), then there are optical imaging satellites a bit lower. The debris won’t get up to Globalstar’s orbit (600km further up) or of course the geostationary belt (36,000km above the earth). However, there are also a lot of government (military and civil) satellites in and around these orbits (including weather and other Earth observation satellites). In a worst case situation it is even possible that Iridium might have to raise the orbit of its remaining satellites slightly, but within reason this could probably be achieved without any additional service disruption.

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09.23.08

Iridium brings much needed validation to the MSS market opportunity

Posted in Financials, Globalstar, Inmarsat, Iridium at 11:05 pm by timfarrar

Despite several successful fundraising deals this year by Globalstar, TerreStar and MSV, Iridium’s deal with GHL is noteworthy as the first investment to directly validate the potential of the MSS market in the absence of spectrum upside, since Iridium cannot free up significant amounts of spectrum for an ATC play.

However, there is no direct read across to the MSS market potential for other players, since Iridium and Inmarsat are the only MSS operators that can provide truly global service across the oceans and thereby address the maritime and aeronautical segments that account for roughly half of wholesale MSS service revenues. These markets segments continue to grow strongly, particularly for broadband communications, and we expect Iridium’s next generation system to be designed to compete more directly with Inmarsat for maritime and aeronautical broadband customers. Combined with moderate progress in land-based handheld and low data rate MSS markets, Iridium should be able to grow its revenue and subscriber base over time, despite increasing levels of competition from new players such as ICO, and Inmarsat’s entry into the handheld MSS market.

Where we can draw some conclusions for other players is on the maximum amount Iridium could afford to pay for Globalstar in the event of a merger, given the value placed on Iridium in this transaction ($591M). Given that Iridium’s revenues this year will be about three times those of Globalstar, and that Iridium presumably does not ascribe value to Globalstar’s ATC opportunity, it seems likely that Iridium would place such a low valuation on Globalstar as to all but rule out any prospects of a negotiated deal between the two companies. At least in this case, it therefore looks like we won’t see a merger being agreed any time soon.

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