30 September 2009

The Iridium saga continues

Iridium has been an interesting case study in the telecom industry. This article points out that there is still a business model its LEO satellite-based system. Without going into details, Iridium was designed to be a system that would enable people to be in touch anywhere. It was developed prior to the widespread deployment of terrestrial mobile systems (eg. GSM) and when voice was the only application of interest. By the time it was deployed and open for business, this had all changed and terrestrial mobile systems satisfied many of the needs for which Iridium was developed and offered diverse handsets, data services and indoor capabilities, which were not available from Iridium. Its fortunes plummeted and was purchased on the cheap in bankruptcy. Today, its 347,000 subscribers generated annual revenue of $1.2 billion (or an Annual Revenue per User of about $3460 per user), so there motivated users (mostly government) exist. I wonder if the new satellites will have data capability ...

Update (7 Oct 2009): BusinessWeek posted this article on Iridium which covers much of the same ground as the previously cited article, but with more analyst insight.

No comments: