Archive for the ‘Iridium Next’ Category

How low can you go?

SpaceX’s bid to serve as the Iridium Next launch agent was cheaper than the Indians and the Chinese.

How low is it?  Shockingly low.

“That $492 million figure would launch all 72 satellites in our constellation,” said Matt Desch, Iridium’s CEO.

So will SpaceX make up in volume what they’re losing in per unit sales?

SpaceX obviously has to first have a successful product before they can start taking government customers away from the big dogs.  If tradition is followed, they can then start amortizing more of their start-up costs by billing to the government.

They’re on their way.  However, like Sea Launch, could their margins be so slim that one failure puts them on an unrecoverable path?

At some point the buyer has to be saying ‘this deal is too good to be true.’  However, both the satellite manufacturing deal and the launch services support the hypothesis that there is a global capacity glut for goods and services and that in effect, it should be a buyer’s market for some time.

So how does one make their money?  By having the U.S. government as a major customer.

What a great irony that SpaceX, the anthesis of the Titan program is using the Titan launch complex/space launch complex at CCAFS and Vandenberg.


SpaceX will be the major launch agency for Iridium next.

Let’s see–here’s my ROM.  As many as nine or ten Vandenberg launches with a massive amount of weight to orbit margin assuming a stack of five or six satellites.  Perhaps other customers will emerge to use up some of that margin, but that adds complexity regarding integration, insurance, and the likes.

Do you think the success of the recent Falcon 9 mission had anything to do with the timing of this announcement?  I’d guess the terms were agreed to pre-Falcon 9 with some sort of verbiage regarding ‘pending successful demonstration of Falcon 9 vehicle.’

Iridium is getting a super deal on the satellites and SpaceX clearly needs other customers than the U.S. government.

The essential details of the WSJ article:

  • $2.1 billion to build the 72 satellites including nine spares
  • $800 million to launch (and to do some undefined ground upgrades)
  • Launches envisioned as 2015 to 2017
  • $1.8 billion in loan guarantees from ‘French export-credit agency’
  • Loral considered the margins so thin that they earlier dropped out of the competition
  • About $1.3 billion of Iridium’s current business is tied to the U.S. government
  • Thales is European-based

There will be tearing of garments and gnashing of teeth at Lockheed.