We are the only commercial provider of communications services offering true
global coverage, connecting people, organizations and assets to and from anywhere,
in real time. Our unique L-band satellite network provides reliable communications
services to regions of the world where terrestrial wireless or wireline networks
do not exist or are limited, including remote land areas, open ocean, airways,
the polar regions and regions where the telecommunications infrastructure has
been affected by political conflicts or natural disasters.
We provide voice and data communications services to businesses, the U.S. and
foreign governments, non-governmental organizations and consumers via our satellite
network, which has an architecture of 66 operational satellites with in-orbit
spares and related ground infrastructure. We utilize an interlinked mesh architecture
to route traffic across our satellite constellation using radio frequency crosslinks
between satellites. This unique architecture minimizes the need for local ground
facilities to support the constellation, which facilitates the global reach
of our services and allows us to offer services in countries and regions where
we have no physical presence.
We are in the process of replacing our first-generation constellation with
our Iridium® NEXT satellite constellation, which will support more bandwidth
and higher speeds for new products. We have completed four of eight planned
launches, and we expect to complete the four remaining launches in 2018. Iridium
NEXT will maintain the same interlinked mesh architecture of our first-generation
constellation, with 66 operational satellites, as well as in-orbit and ground
spares. Thales Alenia Space France, or Thales, is producing the Iridium NEXT
satellites, which are compatible with our first-generation constellation and
current end-user equipment, so that as we replace each first-generation satellite
in our constellation with an Iridium NEXT satellite, we do not affect service
to our end users. In addition to the 40 satellites we have already launched
on four dedicated rockets, we plan to deploy 35 additional satellites on three
dedicated Falcon 9 rockets and one shared Falcon 9 rocket, each launched by
Space Exploration Technologies Corporation, or SpaceX. We estimate the costs
associated with the design, build and launch of Iridium NEXT and related ground
infrastructure upgrades through 2018 to be approximately $3 billion. Our funding
plan for these costs includes the substantial majority of the funds under our
$1.8 billion credit facility, or the Credit Facility, which was fully drawn
in February 2017, together with cash on hand and internally generated cash flows,
including cash flows from hosted payloads. As described in this report, we also
anticipate raising additional capital through the issuance of debt, which may
take the form of debt securities, credit facilities or other forms of indebtedness.
The Iridium NEXT constellation will also host the AireonSM system to provide
a global air traffic surveillance service through a series of automatic dependent
surveillance-broadcast, or ADS-B, receivers on the Iridium NEXT satellites.
We formed Aireon LLC in 2011, with subsequent investments from the air navigation
service providers, or ANSPs, of Canada, Italy, Denmark and Ireland, to develop
and market this service. Aireon has contracted to provide the service to our
co-investors in Aireon, as well as NATS (En Route) PLC, the ANSP of the United
Kingdom, and other ANSPs around the world. Aireon is offering the service to
ANSP customers worldwide, including the U.S. Federal Aviation Administration,
or FAA. Aireon has contracted to pay us a fee to host the ADS-B receivers on
Iridium NEXT, as well as data service fees for the delivery of the air traffic
surveillance data over the Iridium NEXT system. In addition, we have entered
into an agreement with Harris Corporation, the manufacturer of the Aireon hosted
payload, pursuant to which Harris pays us fees to allocate the remaining hosted
payload capacity to its customers and data service fees on behalf of these customers.
Our commercial business, which we view as our primary source of long-term growth,
is diverse and includes markets such as emergency services, maritime, aviation,
government, utilities, oil and gas, mining, recreation, forestry, heavy equipment,
construction and transportation. Many of our end users view our products and
services as critical to their daily operations and integral to their communications
and business infrastructure. For example, multinational corporations in various
sectors use our services for business telephony, e-mail and data transfer, including
telematics, and to provide mobile communications services for employees in areas
inadequately served by other telecommunications networks. Commercial enterprises
use our services to track assets in remote areas and provide telematics information
such as location and engine diagnostics. Ship crews and passengers use our services
for ship-to-shore calling, as well as to send and receive e-mail and data files,
and to receive electronic media, weather reports, emergency bulletins and electronic
charts. Shipping operators use our services to manage operations on board ships
and to transmit data, such as course, speed and fuel stock. Aviation end users
use our services for air-to-ground telephony and data communications for position
reporting, emergency tracking, weather information, electronic flight bag updates
and fleet information.
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