Iridium Satellite wants to be a niche player

(Telephony) Iridium Satellite LLC officially has acquired the assets of Iridium LLC and plans to begin service with the United States Department of Defense immediately. The company will begin servicing industrial customers toward the end of the first quarter.

In addition to the 66 satellites already in orbit, the company will launch seven more in about a year, giving the constellation more than two spares in each orbit.

Planning to work exclusively through service providers, the company has been signing agreements with the major providers around the world, said Dan Colussy, chairman of Iridium Satellite LLC.

While the company intends to pursue industrial segments, such as maritime, forestry and emergency service, it will try to take a stab at the leisure market, including those that have a need to be connected when travelling in remote areas.

“Our focus will be on those companies or customers that need service to remote areas. Based on our meetings there is a need for remote communications services and I don’t see us interfering with cell phone service providers,” Colussy said. “We will be a niche company and we don’t have to be what iridium originally wanted to be.”

Iridium Satellite hopes to begin offering not only voice service but data service at a speed of 2.4 kbps. The company also anticipates offering an advanced data speed of 10 kbps and short burst messaging service in the near future, he continued.

For the first year, the company will provide special offers to those people that already have Iridium phones. In addition, it will offer to take their phones back and upgrade them so they have the latest software that includes data capability.

The company would not disclose any other pricing information saying only that different marketplaces could have specifically tailored pricing.

“With no debt and monthly operating charges of less than $7 million, I am confident pricing will be at or below other satellite operators on the market,” he said. “I can assure that pricing will be competitive.”

“But our strongest force won’t be pricing. Our system is the only one that can offer true global coverage over both poles, all oceans and to every nook and cranny of the Earth. We will take advantage of this strong competitive differential that we have,” he continued.

Boeing has agreed to work with the company and Motorola is expected to provide subscriber equipment.

Although the company would not be specific regarding its investment backing, saying that it enjoys strong backing and solid capitalization, one investor spoke out for the company during the conference call this morning. “I want to state my strong feeling that this service offers an opportunity to serve the markets that wouldn’t otherwise get service.”