Iridium has netted its first hosted payload contract for its next-generation satellite constellation Iridium NEXT.
The mobile satellite operator signed an agreement with Orbital Sciences which gives the latter right-of-first refusal on 20% of the…
Iridium has netted its first hosted payload contract for its next-generation satellite constellation Iridium NEXT.
The mobile satellite operator signed an agreement with Orbital Sciences which gives the latter right-of-first refusal on 20% of the satellite system’s capacity to host third-party payloads. Orbital will, in return, make several non-refundable deposits totaling US$10m in 2011. The parties have also agreed to the basic terms of Orbital purchasing this hosted payload capacity on behalf of its customers.
Iridium stated that it believes the arrangement with Orbital has the potential to be worth more than US$100m, including hosting fees and recurring data service fees once in orbit.
In order to achieve that revenue prediction, the two companies are targeting the US government and are already marketing the network’s capacity to specific government customers to ensure the program can meet the Iridium NEXT deployment timelines and is consistent with other hosted payload programs.
Iridium CEO Matt Desch said, “Commercially hosted payloads on Iridium NEXT offer a significant opportunity to government programs. To achieve the cost savings that commercial hosted payloads offer, it is imperative that companies, and government and research organizations, make plans and design systems now – in advance of our first launches, which are scheduled for 2015. With this agreement, Orbital has locked-in capacity today to ensure certain missions can meet our commercial timelines.
“While Iridium is working with a number of potential hosted payload customers, and expects to announce additional deals in the coming 12-18 months, it’s wonderful to have taken this significant first step.”
The announcement comes hot on the heels of Orbital being selected to serve as satellite integrator and test partner for Iridium NEXT by its prime contractor Thales Alenia Space. Under the terms of that contract, Orbital will integrate the communications payloads and platforms and subsequently test the 81 Iridium satellites (66 operational satellites, six in-orbit spares, and nine on-the-ground spares) that will make up the constellation. The deal with Thales means that Orbital will also be responsible for the integration of the multiple hosted payload platforms.
Iridium is currently evaluating a number of potential hosted payload programs and based on the current opportunities, the company expects hosted payloads to provide between US$200m to US$300m in net cash contributions as well as additional service revenues in 2017 and beyond.
Iridium has estimated that its NEXT constellation will cost approximately US$2.9bn, US$1.8bn of which is to be funded via the Coface-backed 14-year debt facility that the satellite operator secured in October last year. The 72 in-orbit satellites are to be launched by SpaceX over a two-year period starting in early 2015.
