Iridium is Flying High Again

By Greg Trauthwein, Editor
Tuesday, October 02, 2012

The fight in the maritime satcom sector is somewhat analogous to the one fought by Apple and Microsoft in the early ‘80s: two tech companies, polar-opposite philosophies and a raging battle for market share.

Market watchers  likely have noted an increased “competitive spirit” among providers of ship-to-shore communication services. Drivers are multiple and diverse, and include:
•    increased use of shore-to-ship
    monitoring and control;
•    piracy mitigation and emergency
    response;
•    the trend toward data versus voice;
•    the need to keep crew content with         Email, Internet & entertainment.
A corporate driver for change has been Iridium, the McLean, VA-based satellite communications company with a renewed swagger and a plan to make serious market share inroads in the maritime sector. By the company’s reckoning, Iridium’s strength lies in its core philosophy, which is an open architecture approach, relying on the strength and diversity of more than 300 global partners in the creation and delivery of product and service.
“We have deliberately decided not to be too greedy about technology or market control,” said Iridium CEO Matt Desch in an interview with MR earlier this year. “We have opened up our core technical interfaces, chipsets, and technology to external partners so they can trust that our network is the one they want to innovate around.”
According to Herman Pon, Vice President, Technology, the network of Iridium partners is a key advantage. “(Through, and with, our partners) we actually talk to real, potential customers, and take their input in technical design.”
Pon is responsible for all product development of end-user devices, from handsets to modules, from start to finish; and is also responsible for Iridium’s end-to-end service design. Proof that the partner network concept is working for Iridium is the development and delivery of its new service, Global Data Broadcast: an idea that was brough to Iridium by one of its partners. This service — scheduled to debut at year’s end — is a new messaging system that will allow vessel owners of all sizes to simultaneously communicate to its fleet globally, in a standard format. “With Global Data Broadcast we’ll have the ability to offer a broadcast service that, while it won’t have quite the bandwith of an XM, we can broadcast text and information to certain devices,” said Pon. “The modules we would use for Global Data Broadcast are what we call our Short Message Modules, something small enough to be put inside a handheld unit, or embedded in the ship somewhere with an antenna.”

What’s NEXT?
Cornerstone to Iridium’s future is the status and health of its most precious asset, the satellite network that provides its service. While Iridium’s current satellite system is aging, according to the company’s recently released 2Q 2012 report, net income increased 51% year-over-year, benefitting from a $6.6m reduction in depreciation expense due to an extension of the estimated useful life of the company's current satellite constellation.
“We have a new constellation going up – Iridium NEXT set to deploy between 2015 and 2017 – that will be backward compatible to systems like the Pilot that we are deploying today,” said Pon. “So no one will be stranded where they would have to switch to a different frequency band, or buy new units.” Iridium NEXT is a fully funded, approximately $3 billion plan, retaining the LEO architecture with 66 new operational satellites, as well as six ‘in-orbit’ and nine ‘ground’ spares.
“The new constellation will have the ability to offer higher bandwidth speeds,” said Pon. “Currently we’re thinking terms of getting up to greater than 400 kb per second, versus 134 today, so it’s a 2.5 to 3 times increase in speed.”
The new constellation also gives Iridium the flexibity to further enhance what he considers a key company strength: specifically “how to best exploit what is unique about Iridium, which is our global coverage. From a device point of view, we’re always focused on how do we make it smaller, how do we make it cheaper. That’s an advantage we have because of our overall architecture … we can get deployed on a ship at a much lower first cost basis,” said Pon. The price point advantage directly leads to what Pon considers to be another strategic advantage: the ability to carry Iridium Pilot, for example, in tandem with VSAT, as a secondary service back-up or for use when a ship exits VSAT coverage.
 “Take the example of the Iridium Pilot,” said Pon. “The deployment costs of that is going to be much lower than a comparable device, so we are more cost effective for smaller ships, but even in larger ships. They may put out product and service on their ships as a complement to VSAT, so when they move out of VSAT coverage, they can switch to Iridium.”

Conservative Nature No More?
While the maritime industry is often labeled conservative, Pon said that maritime is much more amenable to change than say, the aviation sector, where product approval hoops and product specification are much more rigorous.
“We are seeing a lot of sophistication in the maritime sector. They’re looking to do things like “cash content,” where they may offer services to people inside the ship, for example, so the crew itself are potential customers for whoever put our system on the ship,” said Pon.
In explaining Iridium’s relationship to the end user, Pon explained succinctly: “We are more like a wholesaler, we are Direct TV. When you actually want to buy Direct TV, there is a local installation company that comes in and sets everything up in your house,” said Pon.  “But we have a very strong set of partners that help to ease the transition, because they supply the people to do on-ship installation, and then essentially you have a mini-computer network inside the ship once you install the Pilot, so someone has to configure firewalls, routers on the ship, and to  setup lap tops.”
With its new constellation coming online, a legion of allies in its partner network, and a ‘David vs. Goliath’ chipset on its shoulder, Iridium appears well armed for the battle for market share ahead. Who will emerge the winner? Shipowner’s votes count, and only time will tell


Iridium Pilot

Iridium Pilot is small and durable, with enhanced capabilities to optimize telecommunications across fleets. It is designed to provide full global voice and broadband data connectivity at an affordable cost. It’s also fully compatible with VSAT technologies to even further increase the broadband tool’s value.
For Iridium, it is a complement to its commitment to the broadband market, complementing handheld service.
Iridium Pilot is the third of many products the company plans to “power by” the Iridium OpenPort
Service, a strategy that is designed to provide a growth path for Iridium to expand into new markets. Significantly,  Iridium Pilot is designed to be compatible with Iridium NEXT, the company’s next-generation satellite constellation.
Recently German shipping company Reederei Werner Bockstiegel selected Iridium Pilot to upgrade its shipping fleet with broadband communications. Globecomm Maritime, a long-standing Iridium partner, is offering Iridium Pilot as part of an upgraded “Telaurus se@COMM” communications package, and will manage the installation fleet-wide.


(As Published in the August 2012 edition of Maritime Reporter - www.marinelink.com)

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