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Iridium Goes 'Phew' After SpaceX Gets Off Ground

Iridium executives can exhale. The SpaceX rocket carrying ten of the company's next-generation satellites has smoothly taken to the skies, marking the space exploration company's first successful launch since its costly accident last September.

That rocket explosion, which occurred on the launch pad, destroyed a satellite that social networking giant Facebook had planned to use to provide Internet connectivity in Africa. The accident stoked concern about SpaceX's capability, and the risks for companies relying on its technology, including Iridium.

For the satellite company, the stakes were stratospheric. Set to replace an existing constellation, the NEXT-branded satellites it is launching are designed to support a range of new broadband services for Iridium's partners. Including the ten satellites sent into space on Saturday, Iridium Communications Inc. (Nasdaq: IRDM) plans to launch a total of 70 NEXT satellites with Space X over the coming 18 months, and has reportedly signed a $468 million contract for the rides. In statements, it has described the NEXT project as one of the biggest "tech upgrades" in history.

Moreover, analysts cited in a Bloomberg story reckon the NEXT launch could translate into an additional $150 million in annual sales, and position it for more work with the US Defense Department. They also believe the existing satellites operated by Iridium, which made $432.6 million in revenues in its last financial year, are on the brink of failure.

Another rocket disaster would have been disastrous for Iridium and bad news for companies relying on its technology. It would also have left the satellite company with few options for getting its equipment into orbit.

With the first ten satellites now in low earth orbit, at a testing altitude of 625km, Iridium can start thinking about the next satellite launch, scheduled for April. The orbiting satellites, meanwhile, will undergo a series of tests before they are redeployed to an operational altitude of 780km.


For more fixed broadband market coverage and insights, check out our dedicated Broadband content channel here on Light Reading.


SpaceX had intended to carry out the first launch for Iridium on January 8 but was forced into a delay because of bad weather. The company, founded by tech billionaire Elon Musk, carried out a lengthy investigation following the September accident that destroyed Amos-6, the satellite Facebook would have used, and ultimately blamed an accumulation of oxygen in some of the rocket equipment for triggering the blast. Various steps have been taken to prevent oxygen from building up in the same way again, it has said. (See Iridium Waits With Bated Breath on SpaceX Launch.)

Shares in Iridium are likely to see a further boost when markets open this week. The stock price lost nearly 7% of its value on the day of the Amos-1 explosion, falling to $7.77, but has been on an upward trajectory ever since and closed at $10.90 on the Nasdaq last Friday.

In the wake of the Amos-6 disaster, Facebook CEO Marc Zuckerberg hinted that R&D efforts would subsequently focus on alternatives to satellite technology, including a solar-powered drone called Aquila. Facebook has been looking into various options for bringing low-cost Internet connectivity to parts of Africa that lack regular broadband infrastructure. (See SpaceX Explosion Blows Hole in Facebook's Africa Plans.)

— Iain Morris, Circle me on Google+ Follow me on TwitterVisit my LinkedIn profile, News Editor, Light Reading

OldBob1934 1/17/2017 | 2:56:58 PM
Thank you Thank you for correcting the article. 
OldBob1934 1/17/2017 | 1:19:14 AM
False information The fist line of the article states "That rocket explosion, which occurred on take-off, destroyed a satellite that social networking giant Facebook had planned to use to provide Internet connectivity in Africa."  That is a lie, the rocket WAS NOT beinig launched, it was in the process of being fueled for a static engine firing the day before the expected launch.  There is so much fake news these days on the political front but I would expect a technical site to be more truthful.  Shame on you.
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