Inmarsat may be working directly with airlines where it suits the London-headquartered firm, but its main rival in the satellite-supported cockpit comms and safety services space, McLean, Virginia-based Iridium, is vowing it will never compete with its partners.
“Our predecessors maybe dreamed of going direct and building everything. We never had that aspiration, so having partners was critical to our well-being and [will be to our] success in the future, and now we have over 350 partners. And it’s really the only way we go to market. I’m passionate about ensuring we never change that business model,” CEO Matthew Desch told RGN.
“We don’t compete with our partners … that is obviously different than my primary competitor who has chosen different markets where they compete [directly] or choose partners [for certain regions]. I like our approach and our plan is to stay with it a long time. Our distribution partners, our technology partners, have to compete with each other. So I think one of the reasons we’ve been successful in the aviation space is because of the strength and innovation of the partners we’ve selected to go to market. Maybe we almost signed up too many people, potentially, but I don’t think so.”
This “vibrant” and “competitive” environment has enabled Iridium to crack into the OEMs’ catalogues, ensuring linefit offerability on the A320 [L-3’s satcom unit] and more recently the Boeing 737 [Rockwell Collins’ satcom unit gained approval for the 737 MAX]. And the next generation Iridium Certus service, via Iridium’s forthcoming NEXT constellation, “takes us to the next level, so over the next 15 to 18 months, the first products will hit the market” said Desch.
But due to the increased investment to develop Certus products, Iridium “will be a little more selective” about its value added manufacturers [VAMs] than in the past, he revealed.
We’ll be more selective about hardware partners because, to stay in that category, we want people to invest a lot. So Cobham, Thales, L-3 and Rockwell Collins are the initial ones, and they’re all developing [terminals] and what we’re seeing out of that is real innovation, and I’m really excited about what they’re showing us – what are going to be significantly more powerful than anything available on the market in a much smaller form factor with higher speeds and better coverage, which will accelerate our growth in safety services, cockpit communications and probably get us into the cabin.
Some of the hardware providers will [also] be airtime providers. But all four of the hardware suppliers we’ve announced are planning aviation products. Thales is announcing theirs, the FlytLINK system [a dual satcom, supporting Inmarsat SBB and Iridium will debut on the 777X], and more [are] coming.
Cobham has announced their maritime solution, I don’t know if they’ve announced their aviation one yet [reasons explained by Cobham here]. They all plan to produce aviation products which will be sold by themselves or through other providers who also sell the airtime.”
All four manufacturing partners are “investing the way we thought they would”, added Desch. “They are all in discussion about who should sell what to whom and how, and obviously different ones are going after different market opportunities so there is probably a little bit of buzz about opportunities in the industry that some of them are going after. I’m really pleased with the activity, there is a lot of bullishness about the potential to all lead to success for Iridium in the aviation market going forward. I can’t wait for the products to be available.”
The underlying hardware platform these terminals are built off of is very close to being commercially available. “There will be beta trials, live trials of the underlying tech soon in the maritime market – which will get it first due to the regulatory environment being easier there – so Certus will be commercially available early in 2018 even before our [full NEXT] network is up,” said Desch.
The first product, which will be introduced to the maritime industry, is Certus 350, with data rates of around 352 Kbps. But by the time aviation terminals are certified for Certus, the 704 Kbps version of that service, Certus 700, will be available, and these will eventually support a rate of 1.4 Mbps.
“So really aviation will be Certus 700 where I think safety services, and all kinds of stuff, will be that,” said the Iridium CEO. It offers “the same profile antenna or lower profile than the competitor because we don’t have the look angle they have; at a lower cost with no coverage gaps and better airtime prices. We believe that by the end of next year, and definitely into 2019, we’ll have a powerful portfolio of products to offer the industry that won’t have any peers in terms of performance.”
Interestingly, Iridium originally expected the aviation market would want to wait until the Certus 100 and 200 products with comparative data rates and smaller antennae came to market. “But we’re now seeing that some of the products being built by the manufacturers for 350 and 700 are not much more expensive and [not much] bigger than we thought, so I think the commercial market will want that. Certus 100 [88 Kbps] and 200 [176 Kbps] will be great for UAVs, rotocraft and GA, allowing us to scale down to portable sized [and battery-powered] products and really low cost, but I think that the commercial aircraft industry will be looking at Certus 700.”
But will Certus 700 gain near term approval for safety services? Paul Bedward, Inmarsat’s technical marketing manager, aviation, recently reminded us of the extensive performance testing required for a FANS data communications system. The Inmarsat SB-S performance monitoring required by the FAA’s Performance-based Operations Aviation Rulemaking Committee (PARC) “has taken multiple years to gather the required data for FANS review / acceptance,” he noted on Twitter.
Indeed it has. And even Inmarsat’s conservative timelines have moved to the right.
“I’ll also be interested in avionics design to meet the higher level of security requirements likely required to support ATC developments in Europe,” added Bedward in a LinkedIn statement.
Tens of thousands of aircraft are fitted with prior-generation hardware to support the Iridium legacy network. As NEXT satellites replace the legacy satellites, these aircraft won’t know if they are talking to the new or old satellites overhead. “None of them [the operators] are required to change out their equipment. That is a different strategy than others, who force upgrades which creates opportunity for us,” noted Desch.
“We would have created a huge opportunity for others, if [we said] ‘anything we sell you now won’t work as soon as that comes’ so our strategy very early on was that it had to be seamless, backwards compatible with old satellites [it’s also important for aviation and IoT and every other service Iridium offers] and it has been more seamless than ever expected.”
But he also admitted “we’ve had to work our way up from the low end” in the safety services side of the aero market. “We’re doing basic safety services,” at present, but with Iridium NEXT and the Certus service “we’ll get into really advanced ability to compete in 2019 and beyond”.
Passionate about aviation since he was aged 13, Desch got his pilot’s license at the age of 18. He has flown several thousand miles since, and is on his third plane. He knows that there are “no compromises” in commercial aviation; aircraft fly over the poles, they fly everywhere, “and size, weight, and cost is important to operations when talking about any new system or solution”.
Desch definitely sees Iridium as the underdog in the fight against Inmarsat. “We were developed 20 or 30 years after Inmarsat; we’re taking market share, we’re certainly getting more than our share and it’s really because there aren’t any compromises for the Iridium solution for a purchaser. The avionics equipment manufacturers know that; they know that our system can be less expensive and work more places; and they’ve seen how successful they’ve been in selling our service, and they talk about it because they see what NEXT [holds for the future].
“It’s rewarding to be part of something where our vision is starting to finally pay off where we’re seeing our efforts rewarded. It has been a long time coming. People come up who are not in our industry, say ‘you’re so successful’, and I say we’re a 25-year overnight success story. It takes that time for a satellite company to get to maturity. That is what we’ve been driving to, to be a mature satellite company with cash flow far in excess of network replacement costs and we’re within 12 months of that point.”
Iridium remains uninterested in competing in the broadband inflight connectivity market. “We are in no way trying to compete with Ku- and Ka-band; we’re a complement to that … The expectations will be every person on board will want a gigabit connection and maybe somebody will figure out how to do that for the right cost. There are a lot of satellite providers beating each other up for that. I hope it works out but [we] don’t need to be or want to be [part of it]. We think it’s more important to focus on what we can do well and better than anybody else.”
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