Iridium CEO Defends Economic Viability of LEO Constellations

[Satellite News 08-15-08] The CEOs of Inmarsat and Iridium have made it very clear that the two companies are direct and heated competitors. Andy Sukawaty, CEO of Inmarsat, has commented publicly on what he believes is the economic instability of low-Earth orbit (LEO) satellite constellations – comments which Matt Desch, CEO of Iridium, has taken exception to.
    “It is a silly argument that Andy likes to make,” said Desch. “But it is not making much of an impact on our business results. Regardless of these comments, our company is growing at 30-plus percent.”
    In an interview with Via Satellite associate editor Mark Holmes, Sukawaty said that the concept of LEO constellations is flawed.
    “I would not throw stones at other people’s business plans at this stage, but the one I will throw stones at is the [low-Earth orbit satellite] operator … they are too expensive and will offer the same applications that [geostationary satellites] will serve,” said Sukawaty.
    Satellite News gave Desch an opportunity to respond.
    “When you compare the systems, our satellites are actually quite inexpensive,” said Desch in response to Sukawaty’s comments. “When you add up the true total cost of Iridium’s LEO constellation compared to Inmarsat’s I-4 system plus its three LEO satellites and ground systems, the results are similar.”
    When it comes to coverage, Desch claims his interlink constellation works best.
    “Coverage for any wireless operator is king,” said Desch. “Those are the words we always used in terrestrial wireless – ‘coverage is king.’ We have seamless coverage on the entire planet with no gaps.”
    According to Desch, the LEO satellite’s close proximity to Earth is also a benefit because devices that communicate with a LEO can be smaller and use less power.
    “They can also have smaller and lighter antennas and the connections are almost instantaneous so you do not have to deal with the annoying delay of a GEO system,” added Desch, who also noted what he believes are Inmarsat’s coverage weaknesses.
    “We have a number of in-orbit spares,” said Desch. “If we lose a satellite, it will be unnoticeable to our customers while we repair the hole with a spare. We currently have eight spares in orbit. If Inmarsat has a problem launching their third satellite in the next few months or should lose a satellite, they will have major gaps in coverage that will be difficult for them to repair.”
    Desch also claims that his system is interconnected and can support from one or two gateways while a bent-pipe GEO system needs many gateways to serve traffic around the world.
    “We were built as a mobile system,” said Desch. “That is one of the things that Inmarsat is challenged by.”
    Desch said that his company is continuing to realize new advantages. He asserts that the upgradeability of Iridium’s system allows the company to explore upgrades to its GPS system and netted services and to introduce open port systems in real-time; abilities that Desch believes will continue to bring them new customers.
    “The biggest new customer we are going to have in the next few years is going to be new secondary payloads on our satellite,” said Desch. “We have the best secondary payload real estate of any satellite system in the world because of our revisit times, our proximity to the earth and the fact that all of our satellites are interconnected to bring back data from a sensor or any device to the world cost-effectively.”