You're right, I did not offer any justification for my claim of $5 per minute. I heard this figure from someone who had followed this closer than I a few months ago, and got into a discussion. I really did not plan to spend so much time on this thread, or on this system. However, since I just threw it out there and ruffled some feathers, it's only fair that I provide my reasoning, and then leave this thread. Keep in mind that this is just my own opinion, and I have no insider knowledge of Iridium or any other space comm company. Take it or leave it.
Frankly, I have not followed Motorola's financial plans, and since I don't own the stock I am not particularly interested in the details. However, I remember Motorola's estimates of $3 per minute, and I base my $5 figure on typical cost overruns with new space systems (and being conservative, IMO). I think they may well offer an initial $3 price as a buy-in, but just wait.
Unfortunately, space systems are notorious for high cost overruns whenever new technology has to be developed or integrated. And Motorola is doing both with Iridium. I've seen this for over 30 years, and have no reason to think that we have suddenly made a breakthrough. I'm not sure how aware the typical investor is of how complex the Iridium system is as compared with current space technology. And costs in other systems with even simpler technology have escalated well beyond initial estimates. I believe that the Iridium consortium is heavy on good comm engineers but not as deep in engineers with knowledge of the risks and difficulties in developing new space technology (with some exceptions). Here are just some of the risks and challenges:
- Crosslinked (K-band) LEO constellations are relatively new and untested. Not even NASA has tried this at this level. Researchers looked at this in the mid 80's for SDI, but placed it in the "too hard to do" category. Maybe today we can do it (GPS), but can we do it right the first time? Or will we have to write off some assets ($$) until we get it right? I'm not talking about crosslinking two or a few satellites, but an entire constellation.
- Station keeping fuel and ground control demands of 3-axis hydrazine stabilization for an entire constellation. The military is still learning how to do this well, and they have a pretty good budget and an army (or air force) of people to do it.
- Mechanical failure risks of articulated solar panels. Anyone remember SpaceLab? This may not sound like a big deal, but it is very expensive to engineer.
- Complex ground segment, all built from scratch. It took us a quarter century to get the NASA and military satellite control system in shape.
- Risks from space radiation environment, causing single event faults in sensitive electronic chips -- the kind that Iridium will use -- unless the right kind of rad hard ($$) circuits are used. It took NASA 10 or more years to design the right kind of shielding. Did Motorola tap into this knowledge? I don't know -- I hope so. By the way, the next solar max occurs in 2000 and 2001. What happens if holes start appearing in the constellation from fried satellites?
- Inefficient orbital constellation design: 420 miles, 85 degree, circular gives global coverage, but much of the time you will be flying over the South Atlantic, South Pacific, Antartica, and other uninhabited regions. Elliptical is much better to concentrate coverage over populated areas. I have no idea why Motorola would not have seen that.
Well, I could go on, but you get the idea. If any of these risks causes the degradation or failure of important ground and space elements, you can only expect higher $$, and there goes the per minute charge. Now look at system cost. Motorola says their system cost will be around 3 1/2 billion, give or take a few hundred million. They'd better get a lot of users to pay for this system. Now consider the competition: Globalstar (1.6B), Ellipso (.5B). Would they not be able to provide lower costs, thus drawing potential customers away (assuming their systems are any better)? So now what happens to the break-even per minute charge?
Even though many here will accuse me of inflammatory statements, I am just giving my opinion. For all I know Motorola has thought through all of this and will revolutionize the way we develop space systems. I sincerely hope so, since I work with space systems. I would love to see Iridium work. I own no stock in it, nor do I own stock in any of the other voice satellite systems, since I have the same problems with those. The only space comm stock I own is Orbcomm, but it is not voice. I also own DISH, but it is tv broadcasting, something we have been doing for many years. So it makes no difference to me, financially, whether Iridium succeeds or not. And as I said, I sincerely hope it does and that you all make a bundle. But I have my doubts, and the above tells you what they are. Decide for yourselves, and good luck to all. I'm outta here. |
