[Satellite News 02-03-11] Orbital Sciences entered into an agreement with Iridium Communications to reserve 20 percent of the hosted payload capacity on the operator’s Iridium Next satellite constellation, Iridium announced Feb. 3.
    Orbital will pay Iridium $10 million over the next 11 months to host third-party payloads on the constellation. Iridium said its capacity contract with Orbital has the potential to generate more than $100 million in revenues, including hosting fees and recurring data service fees, once in orbit.
    “With this agreement, Orbital has locked-in capacity today to ensure certain missions can meet our commercial timelines,” Iridium CEO Matt Desch said in a statement. “While Iridium is working with a number of potential hosted payload customers, and expects to announce additional deals in the coming 12 to 18 months, it’s wonderful to have taken this significant first step.”
    The deal follows Iridium prime contractor Thales Alenia Space’s selection of Orbital last week as the satellite integrator and test sub-\contractor, with responsibilities to assemble and test 81 Iridium Next satellites. Orbital also will be responsible for the constellation’s integration of hosted payload platforms. Orbital’s role puts the company in position to ensure its own multiple hosted payloads and capacity, which can be accommodated simultaneously on the Iridium Next constellation.
    “Orbital’s far-sighted move validates the value and importance of commercially hosted payloads. Under President Obama’s National Space Policy, it is clear that our government departments and agencies are directed to take advantage of private sector investments to lower the overall cost of space missions,” U.S. Air Force Gen. (Ret.) Lance Lord said in a statement. Lord also serves on Iridium’s government advisory board.
    The operator said it expects its Iridium Next hosted payloads to provide between $200 million to $300 million in net cash contributions as well as additional service revenues in 2017 and beyond. In a statement to Satellite News, Desch said that developing a more extensive relationship with the government service sector would offset an expected decline in equipment revenues in 2011 (at a rate between 15 and 30 percent). “Our U.S. government service revenues have increased steadily over the past 10 years. Now we are making significant government investments in our channel partners, devices and dedicated gateways. We’re also expanding our service portfolio to support future growth from Iridium Next and hosted payloads.”
    Desch added that the company is focusing on its phased deployment approach for the Iridium Next service, which aims to provide significant throughput and memory capacity and operational flexibility for the machine-to-machine market. “While our current constellation supports ongoing growth and takes us to the Iridium Next era, our next-generation network architecture will provide a sustainable competitive advantage and outstanding new services with backwards compatibility to existing customer devices. Iridium Next will realize meaningful, additional opportunities to support ongoing growth,” he said.
    In November, Iridium won three U.S. defense contracts to upgrade military ground systems. The new contracts, issued by the U.S. Defense Information Systems Agency and valued at a combined $12.2 million, will see Iridium upgrade the Enhanced Mobile Satellite Service gateway in Hawaii, which serves as a dedicated portal for the uplink and downlink of voice and data traffic through Iridium satellites for military and other U.S. government users throughout the world. 
    While Iridium said the deal paves the way for a variety of service optimizations and partnerships in the defense sector, Iridium’s Vice President of Government Programs Scott Scheimreif told Satellite News that the enhancements would support mutual migration towards its next-generation constellation, Iridium Next. “Our global network of cross-linked satellites and supporting ground infrastructure provides vital communication links for U.S. military forces and civilian government agencies deployed anywhere in the world. In addition, we are dedicated to delivering the industry-leading, reliable performance that is certified for our U.S. government customers,” he said.