Iridium rises from the ashes…


Share on LinkedIn

In an earlier post a few weeks ago in which I wrote about Microsoft pulling the plug on its Kin Mobiles Phones, I mentioned Motorola’s Iridium satellite-based phone system as one of the poster-children for technology projects gone bad – the project cost the company $5 Billion before the plug was finally pulled which eventually led to a Chapter 11 bankruptcy filing by Iridium Satellite LLC in August 1999.

Among the many readers of that post who provided feedback afterwards was Diana Souder of Rhodes Communications – Iridium’s PR firm – who was kind enough to provide a current update on Iridium.  

As it turns out, Iridium has spent the past decade rebuilding its business model and by all indications, it seems to be successful. According to Ms. Souder, a lot has changed since the days when Iridium was synonymous with technology failures. Here are some of the highlights of our conversation.

“After re-launching commercial service in 2001, today’s Iridium (Iridium Communications Inc.) embarked on a different business model, targeting vertical markets such as maritime, aviation and government. That strategy has paid off over the last 10 years, and today there are more 359,000 voice and data subscribers worldwide on our network. Privately held Iridium Holdings LLC became Iridium Communications Inc. in September 2009 and began publicly trading on the NASDAQ Global Select Market.”

“The Iridium handset is nothing like the one you may remember. Today’s Iridium handset (the Iridium 9555) is now smaller than many of the first cell phones. It has a retractable antenna and is easily carried at only 9.4 ounces.”

“It is hard to believe, but even today, less than 10 percent of the Earth has cell or landline phone coverage. Iridium works when cell phone towers and even police/fire radio towers are knocked out, as it did in Hurricanes Katrina, Rita and Gustavo. During the Haiti and Chilean earthquakes, we were aware of more than 60 different organizations depending on Iridium for relief efforts. We are the only communications device that works reliably above and below 70 degrees latitude.”

“Iridium reported delivery of $33.9 million in operational EBITDA for the full-year 2009. This financial performance is helping self-finance a significant portion of the company’s $2.9 billion, next-generation satellite constellation, Iridium NEXT, which is expected to begin launching in 2015. Also this year, Iridium announced the selection of Thales Alenia Space as the prime contractor for Iridium NEXT; received a Promise of Guarantee for $1.8 billion in financing from Coface, the French export credit agency; and contracted with SpaceX as a major launch provider for the Iridium NEXT satellites.”

I want to thank Diana Souder of Rhodes Communications for taking the time to read the earlier post and for making the effort in providing this update to my readers – “the rest of the story” as she so aptly puts it.

Here’s the takeaway: Strategy always trumps technology. A decade ago, Iridium had great technology but a lousy business strategy – and it cost them billions. Today, they seem to be making the most of their second chance by focusing on the proper strategy to leverage their impressive technology.


Reader feedback is the lifeblood of this blog – whether you agree or disagree with what you’ve read, please feel free to post your opinions in the comments section below.

Republished with author's permission from original post.

Patrick Lefler
Patrick Lefler is the founder of The Spruance Group -- a management consultancy that helps growing companies grow faster by providing unique value at the product level: specifically product marketing, pricing, and innovation. He is a former Marine Corps officer; a graduate of both Annapolis and The Wharton School, and has over twenty years of industry expertise.


Please use comments to add value to the discussion. Maximum one link to an educational blog post or article. We will NOT PUBLISH brief comments like "good post," comments that mainly promote links, or comments with links to companies, products, or services.

Please enter your comment!
Please enter your name here