Iridium pitches its satellite services as something more down to Earth

The list of companies developing satellite connectivity to cell phones has been growing over the past couple years, with Apple, Globalstar, Bullittt, AST Space Mobile, AT&T, T-Mobile and SpaceX among those chasing different models.

Iridium is in that batch too. In January, Iridium and Qualcomm announced a partnership to bring cellular-to-satellite connectivity to Android smartphones. Iridium is now testing with various OEMs that Qualcomm has lined up to use Qualcomm’s Snapdragon 8 Gen 2 mobile platform.

What’s it like being in an increasingly crowded field – one that Iridium (sort of) pioneered back in the 1990s? To hear Iridium executives tell it, their motto is “bring it on.”

If everyone in the smartphone business includes satellite capabilities in their phones, that’s good for everybody if it increases the adoption rate, said Iridium COO Suzi McBride.

Iridium COO Suzi McBride
Suzi McBride worked on Iridium's original satellites in the 1990s.   (Iridium )

“Of course, we feel like we’ve got the best network out there,” especially with the direct-to-phone capability, she told Fierce.

When Iridium reported its fourth-quarter results in February, CEO Matt Desch said rising interest rates and inflation were not dampening the company’s outlook. In fact, it’s guiding to another strong year of service revenue growth in 2023. Iridium Communications eclipsed 2 million active subscribers at the start of 2023.

L-band advantage

People talk a lot about low earth orbit (LEOs), which is what Iridium operates with its constellation of 66 active satellites, but McBride said that alone isn’t what makes a great service.

Granted, LEOs are closer to the earth and while coverage isn’t as good as higher altitude systems, it offers lower latency. But the type of frequency is another consideration, and Iridium’s spectrum includes L-band from 1616 to 1626.5 MHz.

Motorola very specifically went after that spectrum when it was pursuing the satellite business in the 1990s, said McBride, who was one of the early engineers working on satellites at Motorola then.

“It’s a very good spectrum for voice, text” and short, bursty IoT types of messaging, she said, noting that it’s also very good at getting through environmental elements like rain.

All of Iridium’s satellites can talk to each other, which is important in trying to get solid coverage around the globe. Its system interlinks, versus a rival like Globalstar that uses a bent pipe method, she said. Iridium is most often compared to Globalstar and Inmarsat.

There are some places where Iridium's coverage is restricted, such as over North Korea, but for the most part, it’s covering every place on earth, according to McBride. On its website, the company says its unique constellation architecture makes it the only network that covers 100% of the planet.  

Like some other satellite companies that tried to get off the ground in the 1990s, Iridium went through bankruptcy before settling into its current model. But one thing Iridium did well in the 1990s was the creation of a lot of international goodwill, so to speak. It secured gateways and licenses to operate in far-flung places around the world. That was a big feat in itself.

“There’s multiple angles of what you need to do from a regulatory standpoint, and Iridium is ahead of the game,” she said.

Building 1 satellite/week

Plenty of business analyses have been written about Iridium, but from a technology standpoint, it was way ahead of its time. For example, when she started her career at Motorola, they were tasked with building a satellite in one week. “People thought we were insane saying we wanted to build a satellite a week,” she said.

Nowadays, companies have the capability to make far more than one a week, but it’s still not cheap. Anytime anyone launches a new LEO service, they pretty much have to follow a “build it and they will come” model and launch the bulk of their satellites before they can even offer a service, she said.

“It’s a challenge. I don’t know what will happen with all these other ones coming. There’s a lot of players going after the broadband services,” which isn’t quite where Iridium is playing. Iridium is more about narrowband IoT, voice and safety services. She describes Iridium’s sweet spot as one where people need a reliable connection in a very remote place – whether that be on an oil rig or on a ship, as opposed to consumers using Iridium for their home internet feeds.

If consumers can get satellite connectivity in their cell phones, where does that leave dedicated satellite devices?

“We think they are kind of different market spaces,” she said. If someone is driving across the country and they hit a dead spot on the highway, it’s nice to have a satellite connection if they need to contact somebody.

But a lot of Iridium’s existing customers are in extreme environments, whether for adventure or work, and they want rugged equipment that can withstand the elements. Then there are the equipment makers like Caterpillar that sell products in a lot of countries, and Iridium is a good fit for them, she said.

Big gains in 5 years

Tim Farrar, principal at TMF Associates, said Iridium built an extremely effective satellite business and it’s grown. Five years ago, there were doubts they would get their new system completed and transitioned to a state of growth. Its shares, currently trading around $60, have gained over 425% in value over that same time.

“They’ve really performed very well through that whole process. Iridium is very highly valued at this point in time. People are very pleased at how fast they’ve grown,” he told Fierce. “They’re not as exposed to the competition from Starlink as other players in the industry.”

Establishing an ecosystem like the one Iridium developed takes time. “Iridium has been at it for over 20 years to get to where it’s at,” he said.  

McBride said the biggest shift in the industry in recent years has been getting the satellite costs and launch costs down to a more reasonable level. SpaceX gets a lot of credit for bringing down the cost of launching satellites.

Iridium used SpaceX to launch its second constellation, and as a corporation, “we’re very supportive of watching the advancements happen in the industry,” she said. “I always love to watch advances in technology and space in particular.”

In a lot of ways, Iridium is banking on its years of experience to remain relevant as new players vie for a piece of the action. “It’s kind of the hot place to be and we’ve been here for 25-plus years,” she said.