Land and expand (3/24/22)

Good morning. Welcome to the 47 new subs who have joined us since Wednesday's newsletter went out. We’re psyched to have you aboard the (proverbial) Payload rocket ship.

In today's edition: 🎙️ @Iridiumboss Q&A🌑 Lunar lander updates📈 Space inflation📝 The contract report

A Convo with @Iridiumboss

As mentioned yesterday, Payload talked shop with Iridium CEO Matt Desch for an hour earlier this week. The $5.1B satellite operator (NASDAQ:IRDM) recently announced a number of new partners, which we touched on briefly before getting into the fun stuff:

1. Specialty broadband vs. “sexy” constellations

2. Why link-belt excavators and other massive pieces of equipment stand to benefit from two-way satellite connectivity

3. Handoffs between cell-based and satellite-based tracking

4. On closing the business case for constellations…What’s changed today vs. 25 years ago? (Note: that’s around when Iridium first went bankrupt and wiped out billions of dollars of investment)

5. Patience is a virtue (and apparently a technology)

6. Talk your book…Desch made the case for why he believes $IRDM deserves a higher multiple. He also answered the question: “Aren’t y’all supposed to lose money?”

7. The trials and tribulations facing the whole industry. “Space is very hard,” Desch said. “It’s literally very unforgiving. It always takes longer than you think, and costs more, and will disappoint you before you ever achieve success.”

Breaking out two top-of-mind topics

SPACs: Iridium went public (the second time around) via SPAC over a decade ago. Things are different these days, Desch opined. Young, pre-revenue companies that have recently gone public are “built on no track record whatsoever, only future technology and a business idea…But I really do feel for them and wish them the best.”

Ukraine: Iridium has kept a relatively low profile, with regards to how its SATCOM products and services are being leveraged in Ukraine. But Desch did share fresh data with Payload:

1. Usage of Iridium services in/near Ukraine has jumped by 50X in recent weeks and is still quickly growing.

2. Iridium says “thousands of devices” have been shipped in so far.

3. The company has donated “tens of thousands of minutes of airtime” on its network to Ukrainian organizations, doctors, and relief groups on the ground. 

Find the full Q&A here. To jump straight to the Ukraine-focused conversation, head here.

Lunar Land and Expand

NASA announced yesterday that it plans to issue a call for concepts for another human lunar lander, aiming to give its original awardee, SpaceX, some competition on the Moon. 

New lander concept

NASA plans to release a draft solicitation soon and award a second Human Landing System (HLS) contract in the new year. The new contract, called Sustaining Lunar Development, is being marketed as a means of bolstering competition and ensuring lunar redundancy. 

The US space agency says that it wants two viable options for landers for future lunar missions, as well as human missions to Mars in the late 2030s or 2040s. 

1. The Sustaining Lunar Development contract will cover an uncrewed and crewed demo mission for the new HLS.

2. The new lander must be able to carry more mass and dock with the Gateway lunar station.

3. NASA is targeting 2026 or 2027 for the crewed flight of the new lander.

Administrator Bill Nelson hedged when asked about hard numbers and the value of the contract. He told the press to wait for Pres. Biden to release the FY23 budget next week. What we do know, though, is that the contract will be fixed-price and milestone-based.

And the old one…SpaceX won the original $2.89B contract for HLS in April 2021. Under that contract, the company will perform one uncrewed demo flight and one crewed demo flight (Artemis III). Now, NASA has offered Option B on that contract, which will allow SpaceX to iterate on its design to meet the new specs and perform another crewed demo.

After a formal complaint and failed lawsuit over the first contract award, a “thrilled” Blue Origin said yesterday they will be coming back for a second shot to compete. Dynetics, another original competitor, will also submit a concept.

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Inflation Hits the Space Economy Where it Hurts

ICYMI: SpaceX is hiking prices for launch, internet services, and satellite receivers, the company told customers Tuesday (H/T CNBC). 

The fine text

Starlink: The satellite internet service bumped up hardware costs to $599, a 20% jump. Customers that have already put a deposit down for terminals now owe $549. The monthly internet subscription has also gone up 11% to $110 (vs. the original $99/mo rate).

• SpaceX unveiled a premium, B2B-focused Starlink bundle last month that includes better hardware and faster internet speeds. 

• That service, which has since rebranded to Starlink Business, costs $2500 for hardware and $500 per month for internet service. Those already-lofty prices remain unchanged.

Transporter: The going rate for a rideshare spot on a Falcon 9 was $1M for payloads up to 200kg and $5,000/kg above that. New rates = $1.1M and $5,500/kg, respectively.

Dedicated launch: A graphic on SpaceX’s website now advertises $67M for a dedicated Falcon 9 launch and $97M for Falcon Heavy. The prices were previously $62M for Falcon 9 and $90M for Falcon Heavy, which represents an ~8% bump for each rocket.

The upshot: Elon is singing the inflation blues on Twitter. On March 13, he said that both his EV and space exploration ventures have seen “significant recent inflation pressure in raw materials & logistics.” In customer-facing correspondence, SpaceX pinned its price hikes entirely on inflationary pressures.

The increases are certain to have cascading ripple effects across the space industry, while also affecting the ~250,000 who use Starlink. SpaceX remains the cheapest, highest-cadence launch option for its customers, so it likely won’t see much change in demand. Companies hoping to launch satellites on SpaceX rideshares or procure launches could bear the brunt of the impact.

+ What say you? We want to hear from readers. Will these price hikes affecting your product roadmap or go-to-market plans? Reply and let us know. We’ll keep what you say anonymous unless you explicitly specify otherwise. 

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In Other News

• The pointy end of Crew-4’s American broomstick—aka the next crewed Dragon capsule that will dock with the ISS—has been named “Freedom.” 

• Swarm was Astra’s mystery customer for the LV0009 launch last week, SpaceNews reports. The SpaceX-owned IoT constellation developer launched 16 minisats.

• ESA chief Josef Aschbacher says the European Council has requested a three-month ExoMars salvation study. The agency will try ”to find the most effective way” to get to Mars, now that Soyuz is out of the equation. 

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