Iridium Now Has More 500K Sat Phone Subscribers

Iridium is still a far cry from the dotcom expectations for the satellite network, but it shows that satellite phone services are here to stay.

Iridium reported 508,000 total subscribers for the third quarter of this year, up from 478,000 sequentially and up from 413,000 one year ago. Revenue was $146.1 million, up 25% year-over-year, which enabled the company to post a net income of $11.3 million. It’s not on one level with AT&T, but it is an impressive achievement given the dramatic failure of the Iridium that was launched in 1998 under the guidance of Motorola.

Back then, the network was forecasted by Dataquest to attract about 10 million subscribers by 2003. When the company defaulted on a $1.5 billion loan in August 1999 and eventually announced in March of 2000 that it would shut down, it had fewer than 30,000 subscribers and was stuck with $540 million per year maintenance cost. The $5 billion Iridium network was picked up by investor Dan Colussy for $25 million later that year; Colussy laid the foundation or the Iridium as we know it today.

It appears that Iridium is growing at a fast pace, which prompted the company to raise the 2011 outlook from 20% to 25% of subscriber growth. Revenue growth is estimated to be between 10 to 13%.

According to the company, its commercial users spend, on average, about $50 per month on Iridium voice services, while government users spend about $140. Commercial and government data services are about $19 per month.

McKinney in Business on November 08