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Iridium to launch $3B next-generation satellite network

Mar 26, 2013 11:28 AM

Iridium Communications is preparing to launch a new satellite network starting in 2015 that promises clearer voice calls and faster downloads on vessels.

The company, which is known for its OpenPort maritime broadband systems, expects to begin launching the Iridium NEXT satellites starting in 2015. The $3 billion system upgrade should be fully operational about two years later.

Brian Pemberton, Iridium’s director of product management, said the new network will offer true broadband capabilities and cost up to 50 percent less than competitors.

“The price point to get into broadband connectivity today (is in) the $20,000 and up range,” Pemberton said. “We are thinking that products enabled by Iridium NEXT will shatter that floor and reduce that entry point dramatically.”

OpenPort terminals currently offer baseline data download speeds of about 128 kilobits per second (Kbps), which allows for some light Web surfing, e-mail and other basic services. Iridium expects available download speeds will increase to 1.5 megabits per second (Mbps) once the new system is up and running.

The NEXT system, like the OpenPort service, will have true global coverage. It will be “backward compatible,” meaning it will work with existing Iridium terminals and antennas.

Taken together, the company believes the new network will significantly expand the market for maritime broadband. For instance, Pemberton expects vessels that currently lack satellite service will consider installing the system. He predicts some vessels will even consider adding a second terminal.

“Right now you would never be able to make the business case for two systems on a vessel,” he said. “But if you can get two for the price of one today, think of the kind of flexibility and opportunities that might give vessel operators.”

Iridium currently has 66 satellites and several spares orbiting about 435 miles above the Earth. It’s planning to replace all existing satellites and improve ground stations around the world.

The first of Iridium’s next-generation satellites will be launched on Russian rockets. However, most will be carried into orbit on SpaceX rockets launched from Vandenberg Air Force Base in Southern California.

Iridium, of McLean, Va., isn’t the only satellite communications firm upgrading its satellite network. Inmarsat, which offers the popular FleetBroadband network, will begin launching Global Xpress satellites later this year. The $1.5 billion initiative will offer global coverage and download speeds of up to 50 Mbps.

Inmarsat’s existing broadband service, FleetBroadband, offers faster speeds than Iridium’s OpenPort system, but the antennas cost nearly twice as much. FleetBroadband doesn’t work in the Arctic or Antarctic.

Satellite industry consultant Alan Gottlieb, of Gottlieb International Group, said the NEXT system will be more reliable than Iridium’s OpenPort service. Meanwhile, the company stands to benefit from Inmarsat’s planned March 1 price increase that could raise data usage rates by at least 30 percent.

Based on those factors, he expects bulk carriers and some containerships with low data needs, especially vessels that don’t provide satellite data service to their crews, “are going to be running to Iridium NEXT.”

“The new NEXT will be very good, and it will have speeds up to 1.5 Mbps in the L-band,” Gottlieb said. “And if they price it right, it will have a big hit on Inmarsat’s low-end market.”

Frank Coles, director of Inmarsat’s maritime business, did not directly respond to Gottlieb’s assertions about pricing or competition between the two companies. However, he said Inmarsat is well-positioned with FleetBroadband and Global Xpress to “meet the growing customer requirement for higher bandwidth and data at sea.”

“Global Xpress will combine ultra-high bandwidth and exceptional service quality with global coverage and seamless mobility. Vessels will have access to data speeds of up to 50 Mbps through a 60 to 100 cm antenna, up to 50 times faster than speeds Iridium NEXT can deliver,” Coles said.

He added that FleetBroadband will “continue to meet the needs of the maritime market today and well into the 2020s.”

So how much will the NEXT service cost and how will it be priced? Iridium wouldn’t say. But Gottlieb expects the company will charge customers based on a metered-usage model rather than an “all you can eat” unlimited monthly data plan.

“It’s almost certain that they are going to charge on the megabit of use. This is not going to be competitive with flat-rate VSAT (broadband systems),” he said.

Iridium hasn’t announced any Iridium NEXT-ready products yet, and likely won’t until later this year at the earliest. The devices won’t be on the market until at least 2015.

Still, many of the company’s wholesale customers are already paying close attention. Blue Sky Network, of La Jolla, Calif., is among them.

Blue Sky offers fleet management and asset tracking services on the Iridium network, including the SkyRouter Web portal, which creates detailed maps, allows two-way messaging and even syncs with Google Maps.

Paul Duran, the company’s head of sales and marketing, said Iridium NEXT’s “global pole to pole reliable coverage in air, land and sea will be key to Blue Sky Network fleet management solutions.”

“This will allow our customers to stay connected with widely dispersed assets anywhere in the world,” he added.
 

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