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SpaceX’s $17 billion deal to acquire valuable radio spectrum from EchoStar and bolster its cellular Starlink service has prompted rival satellite company Iridium to adapt.
In a Thursday earnings call, Iridium CEO Matt Desch described the spectrum deal as a “significant event for the satellite industry.”
“We believe this acquisition will likely be disruptive to the status quo,” he said. Desch also expects the SpaceX-EchoStar deal to “hasten the introduction of a global service,” enabling phones to receive cell service from orbiting satellites, rather than just ground cell towers.
According to SpaceX, the EchoStar radio spectrum promises to unleash a 20x increase in data capacity that its satellites can beam to phones on the ground. SpaceX CEO Elon Musk has even entertained the idea of turning the cellular Starlink service into a standalone mobile carrier.
It’ll take a few years for SpaceX to harness the EchoStar spectrum, which requires launching new satellites and laying the groundwork for phones to support the new radio bands. Still, Desch says, “We acknowledge that more competition is coming to our corner of the satellite market. We take this increased competition seriously and believe that this development will affect us as early as the latter years of this decade and most certainly into the 2030s.”
Iridium CEO Matt Desch (Credit: Al Drago/Bloomberg via Getty Images)
Iridium—which also sells walkie-talkie-style traditional satellite phones and GPS trackers—has been trying to power a satellite service for today’s smartphones. That included a 2023 deal with Qualcomm that later collapsed, and an ongoing project now called Iridium NTN Direct.
The company operates 66 active, low-Earth orbiting satellites, but faces a powerful competitor in SpaceX, which possesses the rockets and capability to send up thousands of Starlink satellites. The cellular Starlink service currently spans over 650 satellites, and can already power text messaging, video calls, and app data for phones in cellular dead zones. But for now, the system is only available to US customers through T-Mobile’s T-Satellite service.
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(Credit: PCMag/Michael Kan)
“To be clear, we will be proactive and pivot to strengthen our position amid ongoing changes to the satellite market landscape,” Desch said this week.
“Iridium has focused on providing unique, specialized services in the satellite industry. While we have some areas of overlap with other satellite providers, we have never sought to participate in price-driven commodity markets, and we don’t plan to now,” he added.
This means the company plans to invest in “new growth areas” around its existing industrial-grade services, which will supply satellite communications to IoT devices and GPS tracking. The US government is another major customer, and Iridium could explore “acquisitions in adjacent areas that are complementary,” he said.
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The company is still going ahead with Iridium NTN Direct, calling it “a great entry point” for potentially more market opportunities. “We are making strong progress on this new service, and we’re now in the process of on-air testing from live satellites,” he added. “We are getting good traction for mobile network operators.”
However, Desch also noted: “Broadband D2D [direct-to-device] is still a nascent, unproven market, and absent a partner with spectrum and committed capital to support this type of buildup, we have no plans to go it alone.”
There are also signs that SpaceX will try to become the leading provider of satellite-to-phone connectivity. On Thursday, The Information reported that Apple’s partner for satellite services on the iPhone, Globalstar, is considering selling itself for over $10 billion. That’s raising speculation Apple might eventually strike a deal with SpaceX to use its cellular Starlink service.
During the earnings call, Desch also left the door open for another company to acquire Iridium. “Management even floated the possibility of its next-generation [satellite] constellation being a hosted payload on another satellite operator’s network,” investment firm William Blair noted in a research note.
About Our Expert
Michael Kan
Senior Reporter
Experience
I’ve been a journalist for over 15 years. I got my start as a schools and cities reporter in Kansas City and joined PCMag in 2017, where I cover satellite internet services, cybersecurity, PC hardware, and more. I’m currently based in San Francisco, but previously spent over five years in China, covering the country’s technology sector.
Since 2020, I’ve covered the launch and explosive growth of SpaceX’s Starlink satellite internet service, writing 600+ stories on availability and feature launches, but also the regulatory battles over the expansion of satellite constellations, fights with rival providers like AST SpaceMobile and Amazon, and the effort to expand into satellite-based mobile service. I’ve combed through FCC filings for the latest news and driven to remote corners of California to test Starlink’s cellular service.
I also cover cyber threats, from ransomware gangs to the emergence of AI-based malware. Earlier this year, the FTC forced Avast to pay consumers $16.5 million for secretly harvesting and selling their personal information to third-party clients, as revealed in my joint investigation with Motherboard.
I also cover the PC graphics card market. Pandemic-era shortages led me to camp out in front of a Best Buy to get an RTX 3000. I’m now following how President Trump’s tariffs will affect the industry. I’m always eager to learn more, so please jump in the comments with feedback and send me tips.
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