Wake up call (3/23/22)

Good morning. Welcome to the 54 new subscribers who have joined us since we sent yesterday’s Payload. 

Today, our Hump Day inspiration comes to us courtesy of Buzz Aldrin’s Twitter: “For the first time in over 50 years, a Moon rocket has made its way to the launch pad! This historic moment brings us one step closer to returning to the lunar surface! Our return will truly be the ultimate homecoming!”

If that doesn’t hit you right in the feels, we don’t know what will.

In today's edition: 🌐 Rivada constellation 🎙️ Iridium Q&A 💸 The term sheet

A Q&A with Matt Desch 

Matthew Desch is the CEO of Iridium (NASDAQ:IRDM), a $5.2B satellite operator based in McLean, VA. Payload caught up with Desch across town at Satellite 2022. Over the course of an hour, we chatted about (shocker) satellites, constellation strategy, corporate reinvention, Iridium’s moat, “commodity broadband,” Ukraine, dual-use technologies, SPACs, and more. 

The backstory

There are three certainties in life: death, taxes, and satellite operators going bankrupt. And Iridium is no exception to the rule. 

• That was then…Iridium filed for Chapter 11 in 1999 after sinking billions into a constellation. At the time, it was one of the 20 largest bankruptcies in US history. A group of investors rescued Iridium, and eventually, the satellite company went on to go public a second time—via SPAC—in 2009.

• And this is now…Iridium’s LEO constellation provides voice and data services over the L band. Last year, the company generated $245M in pro forma free cash flow. Iridium works with a partner network of 500ish companies, has healthy margins, and is steadily growing service revenues and its subscriber base. 

Sneak peek

We’ll be releasing the full interview on our website and tweeting out a breakdown later today. We’ll also link to the full thing in tomorrow’s newsletter. In the interim, a few quotes to hold you over: 

1. On patience: “It took 25 years and two generations of satellite systems to get to the tremendous cash flow we're producing today,” Desch told Payload. 

2. On Ukraine’s leadership: Is Zelenskyy using one of Iridium's satellite phones to communicate? “I will be honest, I don't know,” Desch said. “I really don't know.”

3. On wider ops within Ukraine: “We’ve kept a low profile but our service has been highly utilized and prized. Our usage has grown by 50 times or so, in a short period, and is expanding.” 

4. On security postures: “Our wake-up call was about 12 years ago. Based upon the Russian and Chinese ASAT tests—and hackers we saw trying to penetrate our network—we saw that space networks were going to be front and center targets in warfare, global commerce, and communications.” 

Stay tuned for more soon.

High-Throughput Boom

Euroconsult has released the 6th edition of its report on the High Throughput Satellite (HTS) market. The takeaway: Business is booming. The HTS market has seen major growth since 2019, and that growth is expected to continue booming over the next few years.

Euroconsult predicts growth in nine key areas:

1. Consumer broadband

2. Rural connectivity

3. Civil government

4. Corporate networks and energy

5. Military communications

6. Cellular backhaul and trunking

7. Aero in-flight connectivity

8. Maritime communications

9. Video services

Non-geostationary HTS: Broadband constellations in LEO, including Starlink, OneWeb, and SES O3b/mPOWER, are expected to account for 90% of satellite capacity supply by 2026. 

• In 2021, Starlink grew global capacity by 350% nearly on its own.

• OneWeb and SES are beginning constellation operations this year, which will also drive capacity growth.

Not all of the growth in LEO broadband capacity will be able to be exploited right away, though. The report notes that regulations and lagging authorizations will cause delays in allowing access for end users.

Geostationary HTS: Capacity in GEO is also expected to increase over the next few years, though not at the breakneck speeds of LEO capacity. This growth will be driven by increased flexibility on GEO satellites using software-defined systems, per the report.

• Software-defined systems from Airbus, Thales, and Astranis alone have accounted for 80% of GEO HTS orders in 2021.

The big picture: Euroconsult projects that by 2024, global HTS capacity will reach 26,500 Gbps, a more than 10x increase over 2,100 Gpbs capacity in 2019. Consumer broadband is projected to account for 60% of that growth, again pointing to Starlink as the main driver. Demand for HTS capacity is expected to grow by 26% per year over the next decade.

And this increase in capacity demand is expected to come from all across the globe. Right now, North America accounts for ~50% of HTS capacity demand. By 2030, that number will be about 33%.

Read or share this story online.

TOGETHER WITH

The Luxembourg Trade & Investment Office in New York (LTIO-NY), Bradford Space, and Payload are hosting a networking drinks mixer at the Luxembourg Consulate in NYC on Monday, March 28, from 5:30pm to 8:30pm.

If you'd like to attend, fill out this form and we'll get back to you with an RSVP. Space events don't happen in NYC too often, so make sure to sign up soon! 

In Other News

• OneWeb doesn’t know if it will ever get its 36 stranded satellites back from Baikonur, CEO Neil Masterson told reporter Joey Roulette. He also declined to say the number of launches OneWeb has procured from SpaceX. 

• Telstra has announced plans to build three teleports for OneWeb in Australia. The first will begin service in July.

• E-Space, the aspiring mega-megaconstellation developer, will launch three demo sats with Rocket Lab (NASDAQ:RKL) in Q2. 

• Lockheed Martin (NYSE:LMT) has a new satellite bus: LM400. The company will launch demo satellites with ABL Space Systems. 

• Spaceflight Inc. says it has continuously reached out to SpaceX about its decision to end their partnership but hasn’t “heard back yet.” 

• Australia’s military Space Command started operating this week. 

• Commercial Earth observation companies are calling for the US government’s help in protecting their assets. 

• Blue Origin’s New Glenn rocket will not fly by the end of the year, per Jarrett Jones, senior VP for the project.

• NASA’s “Terrier-Improved Malemute suborbital sounding rocket” successfully launched from the Wallops launchpad in Virginia on Monday night. Do we know exactly what that means? No. But do we like how it sounds? Yes. 

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