Iridium enters development deal to bring its network to smartphones

TAMPA, Fla. — Satellite operator Iridium Communications said July 26 it has entered into a development agreement to enable its technology in smartphones.

The operator said the deal with the unnamed company is “contingent upon the successful development of the technology,” as well as a service provider agreement that it expects to finalize before the end of 2022.

“The development agreement also provides for development fees, royalties and network usage fees to be paid to Iridium,” the U.S.-based operator said in a regulatory filing.

“To protect each company’s investment in this newly developed technology, the overall arrangement will include substantial recoupment payments from each company for commercializing a similar capability with another party.”

Iridium declined to disclose details about the project.

Raymond James analyst Ric Prentiss speculated that the service provider agreement could be similar to one Iridium has with Garmin for the GPS technology provider’s InReach handsets. 

That partnership sells the InReach product along with a satellite subscription to Iridium’s L-band network to end users.

Like InReach, phones on the market for connecting to Iridium satellites are specialized devices that are optimized for low-bandwidth mobile telephony, monitoring and tracking applications in harsh and remote locations. 

Potential revenues from expanding an addressable market to the seven billion smartphones in the world “could be quite substantial,” Prentiss said.

Meanwhile, Iridium’s U.S.-based rival Globalstar is rumored to be working with Apple to connect iPhones with satellites for emergency services. 

Startups AST SpaceMobile and Lynk Global are also developing constellations that aim to provide high-speed connectivity services directly to smartphones.

Iridium revealed its development agreement the same day it reported record revenue growth in the second quarter of 2022.

Revenue increased 17% to $175 million for the three months to the end of June, compared with the same period last year. Net income increased 19% to $4.6 million.

“2022 is shaping up to be a blockbuster year for Iridium, as demand for equipment and new subscriber activations drove record revenue growth in the second quarter,” Iridium CEO Matt Desch said.

“We’re seeing momentum across all commercial product areas.”

Iridium now expects to report a 7-9% increase in total service revenue growth for 2022, up from its previous 5-7% forecast.

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