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IT 343-004 Iridium Project
Transcript of IT 343-004 Iridium Project
Satellite Image retrieved from- http://www.isdc.unige.ch/integral/images/medium/integralModel.gif Presented by
Nicholas Miller, Mohammad Mayel, Brian Castello, and Moh-Farn Wu Iridium Satellite Network The Iridium Idea The future of Iridium Planning Phase 1990 Iridium Project goes public at International Press Conference
1991 Iridium LLC created to develop and deploy the network
Extensive Research conducted
Management team built models based on the wireless telecommunications market
$3 a minute charges expected
Need 700k subscribers to be profitable
FCC + 170 countries = costly frequency spectrum Execution Phase What Went Wrong Conclusion Spring 1987 Barry Bertiger: Chief Engineer in Motorola’s strategic electronics division
Ken Peterson: created the algorithms that tracked and controlled military satellites.
Ray Leopald: former Air Force pilot had worked on secure communications for the military with the Milstar satellite system in the 1980s
Durrell Hillis: General Manager Fall 1988 Durrell Hillis presents the project to:
Bob Galvin: Motorolla's Chairman
John Mitchel: Motoralla's CEO Who, What, Where, When, Why Barry Bertiger
John Mitchel Funding New financial plan to raise money
Sell pieces of the company for $40 million each
1993 160 countries in agreement with project
Formation of a multinational corporation
$3.37 billion contract with Motorola
1994 $800 million raised
1995 FCC licensed acquired Best Practice Triple Constraint
Scope: manage scope creep, change control process
Time: critical path, longest path & earliest completion, milestones
Cost: estimating methods, determine budget, controlling costs Satellite Manufacturing "Just in time deliveries"
1996 first satellite complete
$140 million spent on advertising
1997 5 satellites launched
Iridium LLC appears on NASDAQ as "strong buy"
1997 first pager message sent, 47 satellites up
1998 all 66 satellites up + 8 spares Missed launch date - Original: Sept. 23, 1998 Actual: Nov. 1, 1998
Fault ridden launch Breakeven point was 600,000 subscribers
Leads != paying customers
Covenants Vastly underestimated the evolution of cell phones
Product visually dated by time of release Product delivery
Price reduction Chapter 11
Revenue Jan. 1, 2000 was $1.54 million
Sunset Launch Period Cell Phones Subscribers Sales Final Days Iridium service was restarted in 2001 as the newly founded Iridium Satellite LLC. Based in McLean, Virginia, they now utilize 66 satellites rather than the originally planned 77. Where are they now? The satellites are often visible in the night sky as satellite flares. On September 2009, they merged with a special purpose acquisition company (GHQ) to create Iridium Communications Inc, a NASDAQ listed company. Benefits to becoming a public company:
More efficient access to capital
Greater visibility and credibility with customers and suppliers
enhanced ability to attract, retain and motivate world-class talent Company Information Stock market price as of April, 2013 is 6.67 USD. What the future holds Iridium has a strong presence in critical applications such as:
Maritime - up 26% in subscribers
Aviation - up 48% in subscribers
Government - up 6% in subscribers
Land (Mountains) - up 30% in subscribers Iridium NEXT - a new generation of satellites has been planned to begin launch in 2015 and fully deployed in 2017.
New satellites will have a expected 15 year life span
Will maintain the unique 66 LEO satellite architecture, with high coverage, security and availability.
Does have backwards compatibility for existing customers.
Will offer improve data rates, and core technology improvements such as batteries, processors and solar cells. Iridium's major competitors: Reported net income of 64.6 million or 0.83 per diluted share for 2012.
Reported total revenue of $385.5 million.
Has 560,000 billable subscribers at the end of 2012.
Estimated that subscriber growth, service revenue will increase in 2013. Iridium now offers more choices in services:
Phone is priced anywhere from $1000 - $3000
Voice and data services now have pay per minute, prepaid, postpaid, push to talk options
Two pagers were made for the Iridium network. These are one way devices that could deliver messages in SMS. As of December 31, 2012 Iridium employs 211 full time employees. On February 10th, 2009, Iridium satellite 33 collided with Russian Satellite, Kosmos 2251 800 km over Siberia. Technical wonder
"First we created a marvelous technological achievement. Then, we asked the question of how to make money on it."