Iridium and SpaceX Sign Major Commercial Launch Contract

[Chris Bergin]

IRIDIUM AND SPACEX SIGN MAJOR COMMERCIAL LAUNCH CONTRACT
Contract for Launch of Iridium NEXT Satellite Constellation Represents a New Benchmark in Value for Commercial Launch Services

 

MCLEAN, Va. and HAWTHORNE, Calif. – June 16, 2010 – Iridium Communications Inc. (Nasdaq:IRDM) and Space Exploration Technologies (SpaceX) are pleased to announce that the Falcon 9 will be a major provider of launch services for Iridium NEXT, Iridium’s next-generation satellite constellation. The $492 million contract, while being the largest single commercial launch deal ever signed, nonetheless represents a new benchmark in cost-effective satellite delivery to space.

 

Iridium operates the world’s largest commercial satellite constellation, and is the only communications company to offer mobile voice and data services across the entire globe. SpaceX’s Falcon 9 launch vehicle will carry multiple Iridium NEXT satellites per vehicle, inserting the satellites into a low-earth orbit (LEO) as Iridium replaces its current satellite constellation. The Iridium NEXT satellites are set to launch from Vandenberg Air Force Base (VAFB) in California between 2015 and 2017.

 

The contract stipulates that SpaceX will provide launch services to Iridium over a two-year period starting in early 2015. Iridium is also in discussions with, and expects to contract with, at least one additional launch services provider. Launch services are included in the total estimated cost of $2.9 billion for Iridium NEXT.

 

“This is the third major building block on the road to Iridium NEXT,” said Matt Desch, CEO of Iridium. “Two weeks ago, we announced our fixed-price contract with Thales Alenia Space. We also announced our Coface-backed financing plan, and today I am pleased to announce our partnership with SpaceX for extremely cost-effective launch services.”

 

Added Desch, “We are proud to be partnered with SpaceX, and want to congratulate Elon Musk and the entire SpaceX team on its successful inaugural Falcon 9 launch. Hands down, SpaceX offered us the best value coupled with an unwavering commitment to flawless performance and reliability. SpaceX has combined the best of aerospace and commercial best practices to design reliable and cost-effective access to space, and Iridium will be the beneficiary of that effort.”

 

Desch further commented, “SpaceX also offered dedicated Iridium NEXT launch slots within its manifest, which currently has 24 Falcon 9 flights scheduled ahead of us, including those for commercial and government customers, during the coming five years. Clearly, SpaceX has established itself as a significant player in the launch industry, and we have great confidence that SpaceX will build on its recent success and continue to cement an impressive track record of successful space flight in advance of our mission.”

 

The June 4 inaugural launch of SpaceX’s Falcon 9 achieved 100 percent of its mission objectives, culminating in a near b ull’s-eye insertion to its targeted 250km circular orbit. SpaceX has been working with Iridium and Thales Alenia Space, the prime contractor for Iridium NEXT, to ensure compatibility between the satellite design, the Falcon 9 vehicle and the Iridium NEXT program schedule. This full coordination positions Iridium, SpaceX and Thales Alenia Space for a successful multi-year process of designing, building and launching Iridium NEXT.

 

“Iridium NEXT is now our largest commercial satellite launch customer and we are excited to play such an integral part in the most significant commercial space program underway today,” said Elon Musk, CEO, SpaceX. “We are impressed by Iridium’s comprehensive approach and diligence in its planning as the company prepares for the design, build and launch of Iridium NEXT. SpaceX greatly appreciates Iridium’s efficient approach to satellite production – an approach we share when it comes to our launch vehicles. As the next generation of the world’s only global satellite constellation that reliably covers 100 percent of the Earth’s surface, the implementation of the Iridium NEXT satellites will mark a significant achievement in mobile satellite communications, and SpaceX is looking forward to making it happen.” 

 

The SpaceX Falcon 9 is a medium-to-heavy lift, two-stage launch vehicle capable of lifting approximately 11 tons to LEO. Designed to the highest levels of reliability and performance, NASA selected Falcon 9, along with the SpaceX Dragon spacecraft, to resupply the International Space Station starting in 2011. This $1.6 billion contract represents 12 flights to and from the International Space Station. Further validating the reliability and robustness of commercial launch, President Obama recently decided to turn over astronaut transport to the U.S. commercial sector, specifically mentioning the example of Falcon 9 in his historic speech at Cape Canaveral. The U.S. government’s confidence in SpaceX provided further validation for Iridium’s decision.

 

About Iridium Communications Inc.

Iridium Communications Inc. (www.iridium.com) is the only mobile satellite service (MSS) company offering coverage over the entire globe. The Iridium constellation of low-earth orbiting (LEO) cross-linked satellites provides critical voice and data services for areas not served by terrestrial communication networks. Iridium serves commercial markets through a worldwide network of distributors, and provides services to the U.S. Department of Defense and other U.S. and international government agencies. The company’s customers represent a broad spectrum of industry, including maritime, aeronautical, government/defense, public safety, utilities, oil/gas, mining, forestry, heavy equipment and transportation. Iridium has launched a major development program for its next-generation satellite constellation, Iridium NEXT. The company is headquartered in McLean, Va., USA and trades on the NASDAQ Global Market under the ticker symbols IRDM (common stock), IRDMW ($7.00 warrants), IRDMZ ($11.50 warrants) and IRDMU (units).

 

About SpaceX

SpaceX is developing a family of launch vehicles and spacecraft intended to increase the reliability and reduce the cost of both manned and unmanned space transportation, ultimately by a factor of 10. With the Falcon 1 and Falcon 9 vehicles, SpaceX offers highly reliable/cost-efficient launch capabilities for spacecraft insertion into any orbital altitude and inclination. Starting in 2010, SpaceX’s Dragon spacecraft will provide Earth-to-LEO transport of pressurized and unpressurized cargo, including resupply to the International Space Station.

[kevin-rf]

Good job spaceX. Is that 10 launches?

[Nomadd]

Good job spaceX. Is that 10 launches?

 2 launches per plane of six each. If it's the same as the present configuration, 11 operational and one spare each. Just as someone predicted a few pages back.

[kevin-rf]

Good job spaceX. Is that 10 launches?

 2 launches per plane of six each. If it's the same as the present configuration, 11 operational and one spare each. Just as someone predicted a few pages back.

From the presser:

Iridium is also in discussions with, and expects to contract with, at least one additional launch services provider.

Means they are not planning on getting the "whole" contract, and you are assuming they can lift 6 birds per launch. The first time arround Delta II lifted 5 per launch, Proton 7 per launch, and Long March lifted 2 per launch.

So how many launches and how many can they lift in a shot? We don't know yet, but at "current" spaceX without discount published prices that is 10 flights.

[simonth]

Good job spaceX. Is that 10 launches?

 2 launches per plane of six each. If it's the same as the present configuration, 11 operational and one spare each. Just as someone predicted a few pages back.

From the presser:

Iridium is also in discussions with, and expects to contract with, at least one additional launch services provider.

Means they are not planning on getting the "whole" contract, and you are assuming they can lift 6 birds per launch. The first time arround Delta II lifted 5 per launch, Proton 7 per launch, and Long March lifted 2 per launch.

So how many launches and how many can they lift in a shot? We don't know yet, but at "current" spaceX without discount published prices that is 10 flights.

The contract is for 2015-2017. SpaceX will have negotiated an "industry inflation adjustment". So I highly doubt the 10 flight number, it will be more like 8 if not less launches. IMO only of course.

[Skyrocket]

The contract is for 2015-2017. SpaceX will have negotiated an "industry inflation adjustment". So I highly doubt the 10 flight number, it will be more like 8 if not less launches. IMO only of course.

According to this article, it "could involve as many as nine launches"

http://www.latimes.com/business/la-fi-spacex-20100616,0,1577199.story

[kevin-rf]

Which gets the number from an outside consultant... not SpaceX or Iridium

The latest contract, with Iridium Communications Inc. of McLean, Va., could include eight to nine launches in order to take 72 telecommunication satellites into space from 2015 to 2017, said Tim Farrar, president of consulting and research firm Telecom, Media & Finance Associates.

[Nomadd]

 They probably don't want to bet the farm on any launch provider's guess as to availability, so it wouldn't be surprising for them to sign multiple agreements with options to avoid three year delays because someone's schedule was overly optimistic.
 I know SpaceX can't just increase production by whipping the workers harder, but if their business really takes off I imagine they'll be looking at bumping up rates.
 Despite the speculation, I'm sticking with 12 launches, since everything I've heard says they're sticking with the same six plane, 11 + 1 per plane configuration. That greatly simplfies the transition to the new birds.
 

[SIM city]

 We don't know yet, but at "current" spaceX without discount published prices that is 10 flights.

Current SpaceX prices are $56M per launch, paid at signing.  If not, financing charges are added.

http://www.spacex.com/falcon9.php#pricing_and_performance

[SIM city]

More information in the SEC disclosure from Iridium:

Contract for Launch Services with SpaceX
On March 19, 2010, we entered into a Contract for Launch Services with Space Exploration Technologies Corp. (“SpaceX”), which will become effective upon the closing of the credit facility which will be drawn down to fund Iridum NEXT, our next-generation satellite constellation. Pursuant to this agreement, SpaceX will provide us launch services in connection with our deployment of Iridium NEXT. The agreement contemplates multiple launches on SpaceX’s Falcon 9 rocket, with up to nine satellites on each launch, and has a maximum value of approximately $492 million. The launches are scheduled to be performed over a two-year period. SpaceX will also provide satellite-to-launch vehicle integration and launch support services, as well as specified optional services.

We have made an advance payment to SpaceX, which will be credited against the amounts subsequently due under the agreement. This advance payment is fully refundable if we have not, within six months after execution of the agreement, closed a credit facility for the funding of all or a part of the costs of Iridium NEXT.

[mmeijeri]

Hmm, they haven't got the funding yet. Not quite the breakthrough I thought it was.

[simonth]

1. The agreement contemplates multiple launches on SpaceX’s Falcon 9 rocket, with up to nine satellites on each launch, 3
2. and has a maximum value of approximately $492 million.

Which means Iridium has the option of flying all 72 satellites on F9 ("maximum value") and has contracted for 8 flights maximum.

[Blackstar]

Hmm, they haven't got the funding yet. Not quite the breakthrough I thought it was.

There's an article on Iridium's financing situation in last week's Space News.  It's a rather convoluted and complicated situation.  They need to get more financing to go with some that they recently acquired.  The article indicated that further financing was not guaranteed.  In fact, they hinted that Iridium might not get the financing, but that the company had in the past defied expectations regarding financing, so it was not safe to bet against them.

Bottom line: they may or may not get the required financing.  It's not assured.

[ugordan]

There apparently is/was a SpaceX press conference on the contract and Rand Simberg is posting notes: http://www.transterrestrial.com/?p=27574

[Pheogh]

So who "lost" this business then?

[AdamH]

There apparently is/was a SpaceX press conference on the contract and Rand Simberg is posting notes: http://www.transterrestrial.com/?p=27574

Not sure if this should be discussed in another thread but that conference has some very interesting quotes such as the one saying (paraphrased):
"The one question that I didn’t capture was mine. I asked him if they knew yet why the first stage didn’t survive entry, or if they would have to wait for another flight to get better data (because they didn’t get the microwave imaging data they wanted). He said that they still didn’t know, and might not figure it out until they try again. I followed up, asking if he could conceive of a time that they might just give up on it, and pull the recovery systems out to give them more payload. I was surprised at the vehemence of his answer (paraphrasing): “We will never give up! Never! Reusability is one of the most important goals. If we become the biggest launch company in the world, making money hand over fist, but we’re still not reusable, I will consider us to have failed.” I told him that I was very gratified to hear that, because I like reusability."

Very cool to hear that.

[SpacexULA]

There apparently is/was a SpaceX press conference on the contract and Rand Simberg is posting notes: http://www.transterrestrial.com/?p=27574

Not sure if this should be discussed in another thread but that conference has some very interesting quotes such as the one saying (paraphrased):
"The one question that I didn’t capture was mine. I asked him if they knew yet why the first stage didn’t survive entry, or if they would have to wait for another flight to get better data (because they didn’t get the microwave imaging data they wanted). He said that they still didn’t know, and might not figure it out until they try again. I followed up, asking if he could conceive of a time that they might just give up on it, and pull the recovery systems out to give them more payload. I was surprised at the vehemence of his answer (paraphrasing): “We will never give up! Never! Reusability is one of the most important goals. If we become the biggest launch company in the world, making money hand over fist, but we’re still not reusable, I will consider us to have failed.” I told him that I was very gratified to hear that, because I like reusability."

Very cool to hear that.

20+ attempts should be fun to chat about on the forums over the next few years.

"Falcon 9 1st stage recover system mark 17 was tested today, they have now added wings, flaps, and a vodoo tasiman to try to recover the stage."

[Robotbeat]

There apparently is/was a SpaceX press conference on the contract and Rand Simberg is posting notes: http://www.transterrestrial.com/?p=27574

Not sure if this should be discussed in another thread but that conference has some very interesting quotes such as the one saying (paraphrased):
"The one question that I didn’t capture was mine. I asked him if they knew yet why the first stage didn’t survive entry, or if they would have to wait for another flight to get better data (because they didn’t get the microwave imaging data they wanted). He said that they still didn’t know, and might not figure it out until they try again. I followed up, asking if he could conceive of a time that they might just give up on it, and pull the recovery systems out to give them more payload. I was surprised at the vehemence of his answer (paraphrasing): “We will never give up! Never! Reusability is one of the most important goals. If we become the biggest launch company in the world, making money hand over fist, but we’re still not reusable, I will consider us to have failed.” I told him that I was very gratified to hear that, because I like reusability."

Very cool to hear that.

20+ attempts should be fun to chat about on the forums over the next few years.

"Falcon 9 1st stage recover system mark 17 was tested today, they have now added wings, flaps, and a vodoo tasiman to try to recover the stage."

LOL!

I am also glad that Elon think reusability is so important. Hopefully, they will launch enough to make reusability really make sense. It'll be a while, though, most likely (though if they can pull off reusability very simply, then even 10 flights a year will make reusability make sense, a flight rate which they may reach within a decade... though Jim disagrees!).

[neilh]

So who "lost" this business then?

Well, the first Iridium constellation was apparently launched with the Delta II, Russian Proton K, and Chinese Long March IIC. I actually suspect Russia and China might still be getting a few of the Iridium NEXT launches for diversification/scheduling purposes, so they haven't lost quite yet. It looks like SpaceX is the primary launch provider, though.

[Jim]

(though if they can pull off reusability very simply, then even 10 flights a year will make reusability make sense, a flight rate which they may reach within a decade... though Jim disagrees!).

When I made that statement there were no VAFB launches, so the statement is amended to ten launches from one pad.