The Rise and Fall and Rise of Iridium
Iridium's constellation of 66 comsats was a technological triumph but a business disaster-until an executive and a computer geek found salvation in the Pentagon.
- By Craig Mellow
- Air & Space magazine, September 2004
(Page 4 of 4)
Colussy is the first to admit that Iridium will never achieve anything like its originally intended glory. “If you have a cellular or hard-wired phone system where you are, that’s always going to be the way to go,” he says. “Iridium will never be as cheap.”
Conceived in the age of voice and woefully underequipped in today’s age of data, low-Earth-orbit satellites are now commonly acknowledged to have been a wrong turn off humanity’s highway to the colonization of space. “The guys at Iridium are doing a good job with what they have,” says D.K. Sachdev. “But how many electronic systems that were designed in the 1980s are you still using?”
The rescue of Iridium does have implications for organizations wanting to manage technology reasonably. The satellite industry started in the 1960s not as an industry at all, but as an array of government consortia—Intelsat, Inmarsat, Eutelsat, among others—viewed as a second front in the space race and cold war, with all the costs-be-damned culture that entailed. By the 1980s, most LEO projects were captained by big military contractors such as Motorola and Lockheed.
Colussy’s Iridium restructuring started a completely different trend. Since December 2000, little-known private investors have taken over one satellite company after another, betting their own cash on squeezing and niche-positioning them back to health. Last year, Inmarsat, a one-time state consortium focused on maritime communications, was bought by two British venture capital firms. (Inmarsat, a geostationary system that can carry data at broadband speeds, has been running the Iraqi Central Bank’s information systems.) Globalstar emerged from its own bankruptcy this spring, purchased for $43 million by New Orleans-based investment company Thermo Capital. Intelsat, the industry godfather, was privatized in 2001 to its original consortium of governments and former state companies, with a promise to make its shares available on the stock market this year.
Technical director Mark Adams thinks small on a daily basis, particularly when laboring over a new-generation phone that will be less than half the original Iridium’s size, and, at under $1,500, less than half the price. Adams’ watchword is conservation. He and his team have extended the projected life of Iridium’s satellites from 2005 to 2014 through various resourceful measures. The least reliable system on an Iridium satellite, for instance, is a gyroscope that keeps the craft facing the sun, from which it draws energy to power its batteries. Adams and co-workers have figured out how to use thrusters to orient the satellites, saving wear and tear on the fragile gyroscopes. Now Adams and his team are working on extending battery life by letting the satellites take turns hibernating at certain points in their orbits. “These systems, like many products of American engineering, were fundamentally overdesigned,” says Adams. “They were meant to fly five to seven years, but have enough battery for 20. That gives us a lot of ways to stretch that lifespan.”
As for Colussy, now 73, he ran new Iridium for about a year, then passed the reins to chief executive Gino Picasso, who has searched far and wide for a few more customers. Iridium use is picking up among ranchers in the Australian outback, Colussy is pleased to report. And the company is challenging Inmarsat among commercial fishing fleets. New Iridium has run pilot projects in the villages of Senegal, giving native sons who are working in Paris or Washington, D.C., their first chance to phone home.
While his successor nurtures these seeds of growth, Colussy is thinking about the next phase for the satellite industry as a whole. What he sees, now that he has helped break it down into manageable bits, is an imperative to make it bigger and stronger again through mergers. “What needs doing in the satellite business now is consolidation,” Colussy says, the gleam in his eye suggesting he’s mulling prospects more exciting than the afternoon golf game he’s scheduled.