Iridium CEO Explains New Hosted Payload Solution, Expects Steady Stream of Deals

Matt Desch, CEO, Iridium
Image credit: Iridium

[Via Satellite 09-09-13] Iridium CEO Matt Desch is confident that the company can redefine the hosted payload market with a bold new initiative, Iridium PRIME. This solution will host third-party payloads on stand-alone satellites leveraging the global connectivity afforded by the Iridium NEXT satellite network. Iridium is targeting both government and commercial customers for this.

Desch told Via Satellite he is expecting a steady stream of two to six satellites per year taking advantage of this initiative over the next few years. The company has an ambitious plan and, if successful, it could be one of the key players in the hosted payload arena.

VIA SATELLITE: How will you judge the success or failure of Iridium PRIME?

Desch: This is incremental to our current business. Any sales of Iridium PRIME buses will be positive and beneficial to our bottom line and our business. I would be disappointed if there was not a steady stream of two to six satellites per year that would be taking advantage of this. But, even a much lower rate of one or two satellites per year it will be positive to our business and extremely attractive to the customers it serves. So, I think Iridium PRIME is a win-win whichever way you look at it.

VIA SATELLITE: When did you decide to think about launching Iridium PRIME? When did the thinking of this idea happen?

Desch: We have been thinking about it for some time. Frankly, I have been lamenting the fact that we had all these opportunities with Iridium NEXT, many that seemed to be growing with the increases in hosted payloads for flying missions in a lower cost way given budget constraints. We had made changes in our satellite network that allow us to fly more than 66 satellites at a time. The cost structure we are looking at when we complete our $3 billion investment in Iridium NEXT will be dramatically lower for additional satellites. We realized we could take advantage of that investment to create the best possible solution for hosted payload customers. It has all come together at this point in time in a way that will greatly benefit the industry.

VIA SATELLITE: What do you hope to achieve in the first 12 months of Iridium PRIME?

Desch: Given that we have been working in this space for the past five to six years, we have a good idea of the types of missions and types of customers who will find this approach very attractive. We believe there will quickly be significant interest. With the dramatically lower cost to space through this turnkey platform, we believe we will have a number of potential customers knocking on our door – and have had several already. One of the issues we had on hosted payloads with Iridium NEXT was lack of time. We were on a tight schedule for building and launching our new constellation which frankly did not match up with a lot of the hosted payload opportunities, because they needed to get their budgets and programs re-aligned to accommodate flying their missions with us. That won’t be an issue with Iridium PRIME. It is not critical that we sell anything in the next year, but we expect to be working a number of opportunities that could launch as early as late 2017 after we complete the Iridium NEXT program. I am expecting a number of opportunities to emerge over the next year that will see some Iridium PRIME satellites in the air by 2018.

VIA SATELLITE: You say you know who the customers are, who are they?

Desch: It is really a global opportunity. You have the U.S. Air Force, which has announced that they may have a number of missions; you have other governments, which have payloads they would like to launch; you have NOAA and NASA in addition to other U.S. agencies; and you have other international space agencies like the European Space Agency, which would be a great customer. We cover the aviation navigation world pretty well with Aireon, but there may still be interest in automatic identification systems for maritime real time coverage. There are still gaps in weather and Earth observation, which a number of agencies are looking to cover in the most cost-effective way possible. There may even be some potential commercial customers, particularly with the insatiable demand for high-speed broadband.

VIA SATELLITE: When you say commercial customers, what do you mean by that?

Desch: We know of some public or private programs which would like to deliver a low latency-type broadband capability that would complement higher speed, higher latency broadband systems. We believe there are payloads that could be attractive in providing bandwidth to such initiatives.

VIA SATELLITE: Do you expect the breakthroughs for Iridium PRIME to first come in the United States?

Desch: Not necessarily. The United States is traditionally one of the largest spenders on space payloads and on satellites. That will probably continue in the future but we think there are also opportunities in Europe, Asia and elsewhere. The thing about a low-Earth orbiting, inter-satellite-linked system is that it covers the whole Earth, in real-time. We offer a customer the ability to monitor and observe the whole planet at once. It is probably not as interesting an opportunity to a country that is only interested in in-country communications, but there are many more payloads that would like to observe the Earth at one time, and interaction with customers to do that is growing.

VIA SATELLITE: Hosted payload deals for the most part have been very thin on the ground. Why do you think you can make Iridium PRIME a success?

Desch: Iridium PRIME solves some of the problems that have made the adoption of hosted payloads perhaps go slower than the industry otherwise expected. Outside of the original hosted payload space we offered with Iridium NEXT, the biggest issues have been time, standard interfaces, and the ability for a customer to plan on a host platform with certainty. Without those issues being solved, everything we’ve seen so far in the hosted payload realm has been opportunistic. If someone has a payload and a constrained budget, they would typically look for a geostationary type platform that was ready and going to the right place in the geostationary orbital belt. They also had to plan for and build expensive ground infrastructure. While the industry has been trying to find ways to lower those obstacles, Iridium PRIME gets rid of them immediately. Iridium PRIME will set a common standard for payloads and can be counted on to launch whenever ready. Costs can be forecast well in advance, with no need for additional ground infrastructure, so customers can better plan from a budgetary perspective. Iridium PRIME will be much more flexible and solve a lot of the challenges that the industry has today.

VIA SATELLITE: What would you say is the number one obstacle in making this a success?

Desch: I would say bureaucratic inertia. It is clear that the world is moving toward more public-private partnerships and using commercial satellites to launch governmental satellites appears to be inevitable at some point in the future. But everyone has expected with the current hosted platforms and approach that it might be a 10-year cycle before it achieves the kind of success that everyone believes is possible. While it would typically take that long for government organizations to adapt, I believe there are a lot of opportunities that could take advantage of this new approach quite quickly. We think there are many agencies that are going to see the value of this, and given their growing budget constraints will need to try new things to achieve their mission goals. The issue will be how fast will they change from how they have done things over the last 20 years.