Satellite phone provider Iridium at almost 250,000 users

Posted by Wolfgang Gruener

Bethesda (MD) – Remember Iridium? Yes, that is (virtually) the same company that Motorola struggled to keep alive during the dotcom boom and eventually ended up in Chapter 11 bankruptcy. The company has been on a steady curve of recovery since then with apparently improving financials and a subscriber base that approaches 250,000 users.

If you aren’t spending quality time in Antarctica and if your job doesn’t expose you to aviation, maritime or military applications, you may not be aware of the name Iridium. In fact, the name has dropped from our radar since its highly publicized financial struggle when it still was part of Motorola. But since the company’s assets were purchase by a company now know as Iridium Satellite LLC, the provider has been growing significantly in the shadows of the global cellphone boom.    

As of now, Iridium still loses money, but EBITDA for 2007 reached $73.6 million, compared to $53.8 million in 2006. Revenues climbed $212.4 million to $260.4 million in the same time frame. The revenue increase was the result of continued subscriber growth: The company reported 234,000 subscribers at the end of 2007, up from 175,000 at the end of 2006.  

Iridium provides its phone service via a network of 66 low-earth-orbiting satellites. The company offers various fixed communications installation for maritime and aviation use. For mobile land use, there is only one handset available, the 9505A handset, which sells for between $1400 and $1500. Making calls on the satellite phone service isn’t as expensive as you may think: In fact, depending on the prepaid card you purchase, “international” rates can be cheaper than what your cellphone carrier charges.

Iridium prepaid calling cards start at about $145 for 75 minutes and go up to $4250 for 5000 minutes, which translates into per minute charges between $0.85 and $1.93. Considering the extreme environments such a handset can be used in, some may consider these rates a bargain.

Of course, we need keep the numbers in perspective. Iridium cannot and doesn't want to compete on a national level of communications and the company is far from being a mainstream provider. In the U.S. alone there are more than 255 million cellphones in use today.