Servicing Iridium's Satellite Constellation: Business Case (Part 1)

1970's Marshall Space Tug Concept

I have been working with Jon Goff over at Selenian Boondocks on this analysis for about a year.  A couple months ago he started getting real busy.

I wanted to get our ideas posted while the effort was still fairly fresh in my head.  Thanks Jon!  Maybe when you are not so busy we could work on this some more.


Would Iridium pay for an orbital tug to service its current LEO constellation? But why would Iridium even want servicing when they are launching a new constellation?

Why would Iridium Pay?
Iridium provides satellite communication through a network of sixty-six active LEO satellites (with a few spares). Iridium’s satellites are based on a common bus design, the LM-700. Their fleet is spread across six orbital planes.

For you non-engineers like me, think of orbital planes as the paths these sixty-six satellites take around the earth. These six paths are spread out enough to cover the majority of the earth’s surface with several satellites in each plane. This allows Iridium phone calls to be “handed off” from one satellite to another as the satellites revolve around the earth. Here are Iridium’s financial and customer stats for 2009:

• 370K customers
• $320M in Revenues
• $135M in profits (EBITDA)

Iridium has secured funding to launch a new satellite constellation, Iridium NEXT. They intend to begin launching these satellites on SpaceX launch vehicles starting in 2015. Total cost: $2.9B.

Iridium’s current fleet had a designed operating life of 5-8 years. I will use a seven-year design life for my calculations. With initial launches in 1997, Iridium’s current fleet is aprox. 13 years old; by 2015 their fleet will be 18 years old, 2.5 times their designed life.

Iridium’s replacement constellation, Iridium NEXT, is not scheduled to start launching until 2015, however choosing a contractor to build this constellation was delayed from Spring 2009 to Summer 2010. Although Iridium has not formally announced a launch date slip, I believe such a delay is likely. Such a delay would push the start of constellation replacement from 2015 to 2016 or perhaps even 2017/2018. If NEXT were delayed to 2018, Iridium’s current fleet would be 21 years old (3x design life) at the time of replacement.

Iridium's current fleet is getting old! The two most likely systems to fail on the current constellation will probably be hydrazine for station keeping and/or batteries. Hydrazine is the fuel in many attitude control thrusters keeping the satellite pointed in the right direction and incidentally, this is also the fuel used to avoid space debris. Batteries supplement the solar panels.

And what happens to Iridium’s service if satellites do fail? Since Iridium still has a few reserve satellites already in orbit, Iridium would move these reserve satellites to take the place of the failing ones. Users may experience temporary service disruption during the maneuvers. If more satellites fail than Iridium has in reserves, users would experience more spotty coverage, more dropped calls, etc. due to the more permanent gaps.

At least half of Iridium’s revenue stream comes from commercial calling cards purchased and used by the minute. Unlike most terrestrial cellular phone providers, Iridium does not charge commercial customers a monthly rate for pre-defined number of minutes. This means if Iridium starts have satellites fail from lack of hydrazine, they will begin to have gaps in their coverage area. Such gaps will have an immediate impact on Iridium’s revenue.

Without coverage, customers can’t use minutes on their calling cards. If they can’t use up current minutes, they don’t need purchase new calling cards. All this means lost revenue and reputation for Iridium.

Jon and I disagree on whether battery life extension is possible for the LM-700.

But could a tug service be offered to provide a few kilograms of additional hydrazine to each of Iridium’s current fleet? Could a tug service provide deorbiting services for malfunctioning satellites? Could a tug service provide prox-ops inspection services? For the rest of this post, I will refer to such offerings as “servicing”.

Benefits of Servicing:

• Avoid revenue loss due to loss of service
• Avoid reputation loss due to loss of service
• Preserve customer base so $2.9B invested in Iridium NEXT is not sunk cost
• Provide new life for a fleet of satellites that may be able to continue to serve alongside NEXT (for this to be true, a market must be identified for this added capacity)
• Create a sellable product – the current fleet could be sold to a third party once NEXT is in operation
• Avoid damage to operational satellites in either fleet (current/NEXT) by deorbiting malfunctioning satellites
• Once NEXT is in orbit, actuaries within Iridium may advise the company to deorbit the current fleet (3x design life, remember) before they run out of hydrazine and make a mess of LEO, because servicing can deorbit a satellite for Iridium, servicing allows the current fleet to stay aloft longer – increasing revenue (and keeping actuaries happy)!

Risk of Servicing:

• Act of servicing may cause damage to current fleet reducing revenue, reputation, and putting NEXT at risk
• Cost of servicing may exceed benefits when risk is considered
• Reputation damage from trying servicing and having it be ineffective in some way (even with no damage to current fleet) – space is so visible in the media. Any perceived "failure" by the media could play poorly on Wall Street. Iridium is publicly traded (IRDM).
• Small window of opportunity. If NEXT launches on time (beginning in 2015), servicing may need be performed prior to that (service window grows if NEXT is delayed to 2018).
• Risk of the unknown/unproven: Service would be new. It is hard being the commercial guinea pigs for something – just ask all of you who were forced to use Windows VISTA.

To service such a market commercially, you would need to prove your technical solution could:

• Rendezvous and Dock with the LM-700 satellite bus
• Refill hydrazine tanks that were never meant to be refilled in orbit (bring your scissors)
• Develop a method to deliver 5-20kg of hydrazine to each of sixty-six Iridium satellites. That is 330-1320kg of hydrazine!
• Service sixty-six satellites over 6 planes (remember delta-V to change planes quickly is expensive)
• And many other complexities

Why would Iridium be a great first customer?

• Iridium is desperate (or I forecast will become desperate very soon as satellites start breaking). Would they invest $100M to preserve a $2.9B investment in Iridium NEXT.
• Iridium has money ($135M in profits in 2009)
• Iridium is in LEO (making the tug servicing technical solution less complex – reduced latencies, etc.)
• Iridium has felt the pain of debris impacts
• Iridium has a ground tracking station a tug service could piggy-back off of

Sounds fun! When do we get started?

[UPDATE: Jon just posted Part 2 up on his blog.]