New Life for Iridium?
Satellite phone company Iridium appears to be the comeback kid following its acquisition by GHL Acquisition, which took the company public this week with an expectation of raising at least $160 million. The company needs funding for a new generation of satellites, Iridium NEXT, estimated to cost about $2.5 billion.
After spending $5 billion on building and launching a constellation of 66 satellites (plus spares), the original Iridium declared bankruptcy in 1999. It was purchased by investors for $25 million in 2000. The new Iridium Communications, Inc. developed a business plan focused on government and industrial markets, not consumers. News reports estimate that the company currently has about 325,000-350,000 users.
As reported by Digital Trends, satellite phone service is quite expensive ($1.50 – $1.75 per minute) compared to terrestrial cell phones, but it is a premium willingly paid by users with few options because of their location or special circumstances. Satellite phones were brought into New Orleans for emergency services after Hurricane Katrina destroyed that city’s telecommunications infrastructure, for example.
Iridium has most recently been in the news because of the collision of one of its satellites with a defunct Russian satellite on February 10, 2009, creating a cloud of debris expected to plague satellite operators for many years to come. Iridium services were barely affected, however, with an in-orbit spare replacing the lost satellite within weeks of the collision.