DW: Good day and thank you for allowing Dataweek to meet with you.
Brian: Pleasure. Let me start by giving some background about Iridium. We are a low Earth orbit satellite operator. We like to say that we made LEO cool before it was cool, before Mr. Musk and the others decided to play in our backyard. Iridium is a thriving business and is the satellite leader in IoT.
We serve various markets, which include aviation, maritime, and governments. IoT is really the fastest growing segment for Iridium, and now there is an obvious convergence happening in this industry, where satellite operators are starting to team up with mobile network operators.
We saw it with Star Olympic T-Mobile. We have seen it with Verizon and AT&T.; Everyone is interested in extending their coverage or filling in the gaps in their coverage, and Iridium, having an existing constellation, globally licensed spectrum, and not in need of any external funding is ready and probably the most suited to answer the call on this.
We therefore launched a program called Project Stardust in early 2023. We have now commercially named it NTN Direct. The idea here is to take our proprietary design and service and alter it to be able to serve a standardised market.
So rather than us selling hardware that is designed to work on our network, we are going to be leaning on the Qualcomms and the Nordic semiconductors of the world; those companies that design chips that go into phones, that go into devices. They are going to be enabling features which allow them to reach our network.
DW: May I start by asking the question, did Iridium originally start as a geostationary orbit constellation?
Brian: No. We have always been the original LEO, so 66 low Earth orbiting satellites. This is now our second-generation constellation that we are flying, but for all intents and purposes, other than the technological advancement of the actual satellites, our first-generation architecture looks the same as our second-generation architecture.
DW: So, your constellation consists of 66 satellites, 80 in total, but 66 online. How does that differ to the Starlink or the Lynk Global networks?
Brian: Well, I will never compare us to the Lynk Global Network. I do not think that is a real network yet. They have got just a few satellites, and they need a lot of help to get into a world where they can offer a commercial service.
DW: I did not mention Project Kuiper because they have only got a couple up there at the moment.
Brian: Yeah. They have got 27 up, which is their first real commercial launch. But before that, they had a couple of test satellites up. Essentially what those folks are doing is they are launching low cost, faster tech refresh cycle satellites. So, if we use Starlink as an example, because they own the launch partner which is SpaceX, they can launch these satellites very often. The issue with that is now they are getting into a period where the Starlink satellites, the original ones that were launched, are starting to age. So, they are de-orbiting satellites as quickly as they are launching because they only have a lifespan of five to seven years.
Our original constellation lasted 20 years. This existing constellation is projected to last through 2035 and beyond if we really want it to, although we are probably going to refresh sooner than that just to enhance capabilities. All satellites fly in LEO, whether it is us or Starlink; everyone has their own lane, and we work together to make sure there are no collisions.
They are throwing up far more satellites, thousands versus the 66 plus 14 that we have got in orbit, and what they can do is offer more broadband type services. This is what you are seeing as their bread and butter today. We have never been looking at that space. Broadband is not a market we have ever looked at. We will leave that to Starlink. Prior to that you had Viasat, you had Intelsat, you had SCS, trying to play in that world, and unfortunately, Starlink has kind of crushed them.
We have been unique in that we focus on narrowband solutions which are highly resilient. Because we operate in L-band, it is very tolerant of different environments and weather – rain, snow. From a safety services perspective, you will always find that L-band is used for things like global maritime distress safety services. They need the ability to call back and get emergency services, coordinate with Coast Guard, etc. With regards to aviation, a large portion of commercial airliners have Iridium voice capability so that a pilot can call back should there be a need because of some sort of emergency.
So, because it is L-band, we are unique in that space with Inmarsat to provide those services. That is our lane. It is those narrow band, highly mission critical safety services where Iridium really thrives.
Now, being global, we are into IoT, which is about deploying assets in the most remote areas of the world, so that things can be monitored. You can do climate change projects, so you can monitor oil rigs and do mining and utilities. It is not going to be anywhere near where an MNO is operating, and that is why Iridium is unique to answer that call.
DW: Does regulatory approval across the different countries affect your service in any way?
Brian: It does not only affect mine; it affects just about everyones. We already have our regulatory approval for our globally licensed spectrum, so pretty much everywhere outside India, which is very highly regulated ever since they had the Mumbai terrorist attacks. Everywhere else we have the ability to operate on the ground, to have users using our services, and that is unique to Iridium.
If you look at other L-band operators like Inmarsat, because they are geostationary, their satellites are fixed in one location, and they do not cover the edges of the Earth. So, they do not have coverage in the South Pole. For use cases like maritime, big fleets are starting to sail over those edges because it is a faster road.
DW: There is one product that Iridium has, the Iridium Go. It is a small direct-to-satellite connection, but it offers very small amounts of data transfer. Are there any plans to increase that to try to be competitive with the new players?
Brian: No. We have got the Iridium Go and the Iridium Go Exec. The Go Exec is a little bit more capable. You can do things like send pictures and voice notes and get more graphical type stuff online – send emails, chat, WhatsApp. It is battery operated, which allows a user to take it in their backpack and just have connectivity. Whereas if you look at a Starlink Mini, it is a power-hungry device. You need to connect it to a power source. It is not very versatile in terms of being able to take hiking or something like that. If you do get it online, you get good speeds. Whereas for our capability, the use case and applications are limited.
And again, we are not getting into that broadband commodity space. We are going to continue to focus on someone taking our device with them because they want to be able to just touch base with their loved one. They want to let them know they are okay or get some help should they need it.
We now have the Go Exec, which is about ten times the speed of the Go. The Go gives you 2,4 kbit/s, while the Go Exec is going to give you 22 kbit/s on the downlink, and 88 kbit/s on the uplink. So, it is faster, but we are still talking about kilobits here. And again, that is the world we operate in. To be clear, it is not something that we sell millions of per year, but for a user that is going somewhere where they know they are not going to have connectivity, no access to a power source, that is their lifeline.
DW: Are you not concerned about losing customers to the new players in the satellite space?
Brian: Honestly, we have been dealing with the Starlink effect for several years now and if you look at our earnings and our financials that we report on a quarterly basis, we are not shrinking. We are growing year on year from a service revenue perspective, and our equipment sales are strong. We are doing well because we operate in our lane. We have seen the effects of other players competing in the broadband space. Those guys are being crushed because their bread and butter is providing broadband, but it was a $20 000 terminal, and here comes Starlink with a $500 piece of equipment, which you cannot compete against.
So yeah, I am not concerned. We are growing, and this NTN D2D [direct-to-device] space has got massive volumes which we are uniquely set up to answer.
DW: Over the next seven years, it has been forecast that the satellite communication market is set to quadruple. Where do you see Iridium at the end of that period?
Brian: I am sceptical that the satellite market will quadruple. I think that a lot of the analysis and numbers that are being thrown out by various publications and groups that do these types of studies, are looking at an industry where satellite and terrestrial converge and suddenly there are all these users with access to a network. Access to the network is meaningless unless the user uses it. It comes down to how often they are going to need to use it. How much they are willing to pay when they use it, and how good that user experience is going to be. So, I’m sceptical that even a Starlink is going to be able to provide a user with the experience they are used to today on a terrestrial connection.
It comes down to physics; the size of the antenna, the power required. The devices that we all carry in our pockets are limited on those. No matter how much power you beam down from space, you are still not going to be able to deliver even a 4G experience, and today we are used to 5G.
So as a user, am I willing to pay $10 or $20 a month for this? I do not know. If I am going away for a month, I might want to sign up for it. But again, I do not think anyone has proven that they can monetise it yet. I think we are at the stage where we are starting to see some indications of price points, but no one has seen the $35 billion or so that they are forecasting this to be yet. And no one has seen the number of users sign up for it that has been forecast.
But again, in terms of IoT, we can uniquely cover areas that Starlink will not be able to. When it is in exclusion zones or in areas where other operators do not have spectrum footprint, Iridium will be the answer. We will either be primary in some cases or you will find us being a companion to Starlink. A complimentary solution where a single device with a single sim card can, for example, reach T-Mobile on the terrestrial side.
DW: Okay. Can I read into that, that Iridium has got plans to partner with MNOs in the future?
Brian: Yes. 100%. And sooner than you think.
DW: To take the question a step further, are there any plans of getting into Africa in terms of partnerships?
Brian: I would love to and am very open to it, but I cannot say that I am in a proactive conversation with an MNO in Africa. It is a very large land mass with lots of mobile network operators. Should an MNO come and say, hey, I want to do this NTN thing with you guys, it is wide open. We just have not been approached yet.
DW: If you do get into a partnership with an MNO, do you foresee the pricing model for end users bundled into an existing mobile plan, or will it be an add-on?
Brian: There are a couple of different answers to that. But it is really up to the MNO. I think when it comes to emergency services, there is going to be a model where it is MNO-sponsored because it is the right thing to do. It is inexpensive and the usage on it is not huge. In terms of messaging, I think an MNO will be able to sell a subscription model where that user gets a hundred messages on satellite. Or maybe they will pay per drink because the user may not know they need it. Suddenly there is an outage somewhere and they need to send a message out. Well, they should still be able to do it. We should not stop them from doing that because they did not have a subscription.
DW: You said your network is currently using your second generation of satellites. Are there any plans in the near future to roll out a third gen, and what type of timeframe are we looking at?
Brian: Publicly we have stated that our existing constellation has a projected life expectancy through 2035. We are currently in the planning, design and evaluation phase of our Gen-3. Since we completed our launch of this constellation in 2019, the technology’s evolved so much that we may decide to go lower cost satellites, but more of them. Or we may decide to do something similar to our existing constellations, but with larger satellites that can beam down more power. We are now in that phase where we are looking at companies that design satellites for what suits our needs and what is best, and I would say sometime in the next 12 months, we will have made a selection.
DW: To conclude, does Iridium have any upcoming announcements that you could share at this time?
Brian: Yes. In the middle part of this summer or early summer, we are going to announce that we will be on air with a test capability. That means that we are going to be updating a portion of our satellites so that MNOs can come to our facility in Arizona and actually do testing. This has been done in record time. There has not been a satellite operator that has been able to take a proprietary network and slice off a portion of it to offer a standard solution in this timeframe. We are really proud of that.
DW: I appreciate you taking the time to chat to me. It has been very enlightening.
Brian: Absolutely. Thank you for your time.
For more information visit www.iridium.com
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