Russia is set to significantly increase its expenditure on defence and national security according to a draft 2023 to 2025 budget.
Iridium to raise bandwidth bar as aero growth soars
Mobile satellite operator Iridium is working on a new aeronautical service that could see its maximum data rate to aircraft boosted to 128kbit/sec as early as the end of next year. The news comes as the company reveals a near-50 per cent 12-month increase in its aero user base, and revenues across all markets up 19 per cent to $88 million in the third quarter of this year.
“Our aero business continues to grow at record rates,” says Don Thoma, executive VP for marketing. “There are now more than 18,000 Iridium terminals in the aviation marketplace – that’s 48 per cent growth compared with the same time last year.” Among the partner companies contributing to that figure are Aircell, Blue Sky Network, ICG and Sky Connect, serving the business aviation, helicopter airwork and air transport markets.
Hitherto the company’s Achilles heel in aviation has been the low bandwidth – maximum 4kbit/sec – of its data services. The company, buoyed by the prospect of a major cash infusion in the New Year, is now planning to put that right.
“We’ve just introduced OpenPort, a maritime product that provides IP data speeds of up to 128kbit/sec plus three voice lines,” says Thoma. “One of our major focuses for next year is an aviation version of OpenPort. The key element is the aircraft antenna. We don’t have any strong background in that domain, so we’re working to select a partner to develop the antenna. I hope we’ll be well on our way to introducing a product by the end of next year – the big unknown, as always in aviation, is certification.”
He continues: “The aim is to deliver up to 128kbit/sec per channel into the aircraft, along with a very attractive value proposition. This system will eliminate the need to gang up a series of modems to obtain more bandwidth – instead it will use our network in a very efficient way by exploiting unused capacity.”
Iridium’s news of bigger bandwidth for the buck comes against the background of a healthy third quarter and progress on a refinancing deal expected to yield several hundred million dollars in ready cash.
In the three months to the end of September the company recorded net income of $16.9 million out of revenues of $88.2 million. Total subscribers across all of its markets – it serves land-mobile, governments and other segments as well as aeronautical and maritime – stood at 309,000 worldwide, an increase of 37 per cent in 12 months. Revenues in the first nine months of the year totalled $244.2 million, 26 per cent up on the same period in 2007, while net income was $52.3 million, a 51 per cent improvement .
These figures will gladden hearts at New York-based GHL Acquisition Corporation, which is “acquiring” Iridium in a complex financial manoeuvre that will eventually see it renamed Iridium Communications Inc and benefiting from an injection of around $400 million in new funding.
Earlier this year GHL raised the $400 million in a “blank cheque” initial public offering (IPO) of shares with Iridium in mind. GHL Acquisition is in fact a vehicle created specifically by New York investment bank Greenhill & Co to facilitate the injection of the IPO proceeds into Iridium. It is 17.5 per cent owned by Greenhill, and the companies have a common chief executive in Scott Bok. Iridium and GHL Acquisition plan to “merge” to form Iridium Communications. The deal is conditional on the approval of the US Federal Communications Commission (FCC), which is expected to be forthcoming in the first half of next year.
“The capital and cash that GHL has on hand should pay down our debt and provide what we need to operate the company for several years,” says Thoma. “It also puts to bed for a while all questions about our ability to fund NEXT, the new constellation we plan to have in operation from 2016.”
Potential prime contractors Thales-Alenia Space and Lockheed Martin are currently working on competing system design specifications and proposals for the development and deployment of NEXT.
“We expect to see that completed by March, and to select one of the two companies in the second quarter and enter into a firm fixed-price contract for the development and deployment of NEXT,” says Thoma. “We’re very encouraged by where the technology is headed in terms of things like batteries, solar panels and processors. They’re all moving in the right direction, creating the possibility of improved services at a better cost/performance ratio than is possible with our first-generation system.”
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