Case study About The Rise and Fall of Iridium

What is “Iridium”

• The Iridium satellite constellation is a large group of satellites providing voice and data coverage to satellite phone, pagers and integrated transceivers over Earth's entire surface.

• To build the satellite network, Iridium spent $5 billion.

• Motorola also served as the project’s prime contractor.

History

• Iridium communications service was launched on Nov 1, 1998 and went into bankruptcye on August 13, 1999

• The first Iridium call was made by then-Vice President of the United States Al Gore

• Motorola provided the technology and major financial backing.

Reason to downfall

• Insufficient demand for the service, coupled with a massive initial capital cost

• The increased coverage of terrestrial cellular networks (e.g. GSM) and the rise of roaming agreements

• The cost of service was also prohibitive for many users

• The bulkiness and expense of the handheld devices • Mismanagement has also been cited as a major

factor

Disadvantages of GEO:

• The first and foremost limitation of GEO satellites is round trip latency

• The second limitation of GEO schemes is cost. Because the orbit is 36,000 km above the equator, you need to use a big satellite with powerful transmitters, high performance receivers and large antennas

• Increasing complexity the potential for hardware failure increases

• poor performance in the polar regions

Low earth orbit (LEO) is used for iridiumAdvantages of LEO:

• LEO model satellites are placed into a circular inclined orbit several hundred kilometres above the earth's surface

• This model are very low launch costs per satellite • Modest demands on antenna, receiver and

transmitter performance • Very low propagation latency times

Disadvantages of LEO

• Global coverage will require many satellites • Cannot build a LEO constellation to cover one part of

the world alone • The limited life of the satellites

Background on Motorola and Kyocera

• In 1930 the company introduced the first practical and affordable car radio.

• Motorola was composed of three business units: Integrated Electronic Systems, Semiconductor Products, and the Communications Enterprise.

• Kyocera introduced the world’s lightest CDMA cellular handset, the world’s smallest satellite phone,and the world’s first wireless, handheld videophone with color display

Iridium Costs and Financing

• The capital cost consisted of two components: 1) the Space System contract for the design, development, production, and delivery of the satellites into orbit

• 2) the Terrestrial Network Development contract to design the gateway hardware and software.

• The Canadian firm, COMDEV, was responsible for the antennas for intersatellite and gateway links .

• Three suppliers from around the world were used to launch the satellites:

Iridium Service

• Motorola eventually launched 66 satellites into low-earth-orbit.

• Motorola developed an assembly line production process that allowed up to ten satellites to be under assembly at one time.

• Each satellite carried its own phone switching system and the network used complex satellite-to-satellite links that permitted phone calls to be switched in the sky.

• Improved coverage and performance, the weight of the satellite increased very little because of advances in electronics.

• Based on statistical analysis, the satellites were expected to last about six years before they would

• burn up in the earth’s atmosphere, although sufficient fuel was provided for eight years.

• The handsets were manufactured by Motorola and Kyocera and were seven inches long (plusantenna), weighed approximately one pound (Iridium promotional material described the handsets as“small, lightweight, hand-held telephones”), and retailed between $2,200 and $3,400

• Service fees ranged from just under $2 per minute to as much as $7 per minute for some international calls