SatMagazine (SM)
It’s been two years since we last talked. At that time, you had recently joined Iridium to head up the company’s data services business. Before we get started with questions, please refresh our readers’ memories as to your background in the field and your current responsibilities with Iridium.
Sure. It’s great to talk with you again, and I have a lot of exciting news to share with your readers. By way of background, I was deeply involved in integrating GPS and wireless devices with Motorola during the early phases of what eventually became the booming telematics industry. I also served as vice president of data at Sirius Satellite Radio, where we created and launched a variety of data services. As vice president and general manager of data services for Iridium, my team works closely with product management and the engineering team to help shape global market requirements for Iridium data products and services. I am fortunate to work with a talented and tenured team, and we work closely with our growing ecosystem of value-added partners who spearhead our penetration into newly evolving, higher-volume market segments for mobile machine-to-machine (M2M) data.
SM
We understand M2M data is Iridium’s fastest growing vertical market. How fast is it growing?
Patrick Shay
As of the end of the first quarter of 2011, our commercial data subscribers grew 62 percent compared to the same quarter in 2010, and our government data subscribers grew at 80 percent, year-over-year. This is a substantially higher growth rate than our commercial and government voice service subscribers.
SM
What is driving the rapid growth?
Patrick Shay
Market demand for mobile data is booming in the government, consumer and enterprise marketplace, including vertical segments such as transportation and telematics, safety and security, maritime, aviation, utilities and industrial. Large organizations both public and private are integrating mobile data into their enterprise resource planning and logistics management infrastructure, in a move to improve visibility over assets and supply chains. In the consumer arena, GPS-enabled mobile phones and messaging devices are giving rise to a totally new Location-Based Services (LBS) industry market. To a large extent, the proliferation of GSM/GPRS wireless networks around the world has been driving this growth. A recent Frost & Sullivan report projects that the number of cellular mobile data connections will exceed 400 million by 2017. Iridium’s M2M business is a subset of this growth, and we are riding this overall market wave.
The fact is that only about 10 percent of the Earth’s surface is reached by terrestrial wireless networks. What about the remaining 90 percent? The only practical alternative is two-way satellite data links. There is an enormous market potential in satellite M2M, and Iridium is uniquely positioned to seize a large market share in it. Tim Farrar, an industry analyst with TMF Associates, estimates that the addressable worldwide market for low-data-rate satellite M2M devices will grow by more than 20 percent annually to more than 3.4 million units in service by the end of 2014.
SM
What is Iridium’s value proposition for M2M?
Iridium is the only mobile data communication carrier providing coverage over the entire face of the globe. Iridium’s constellation of 66 low-Earth orbit (LEO) cross-linked satellites provides latency of less than 60 seconds for end-to-end delivery of data messages anywhere on Earth. Importantly, Iridium short burst data (SBD) provides full duplex (two-way) data connections. This means data can flow both to and from the mobile data device, enabling remote programming and interrogation capabilities. As the world’s furthest reaching communication network, we offer a standardized data communication vehicle that works across trans-national borders, and covers the large parts of the world without reliable GSM/GPRS coverage. In many cases, our partners are bringing to market dual-mode GSM/GPRS and Iridium devices with the least-cost routing and automatic failover to Iridium when beyond the range of terrestrial towers.
SM
Tell us about the new SBD device you introduced last year.
Patrick Shay
The Iridium 9602 SBD Transceiver is a major driver of our rapid growth in satellite M2M. The matchbook-sized Iridium 9602 is 69 percent smaller, 74 percent lighter and considerably less expensive than the first-generation Iridium 9601 SBD transceiver, which we designed the Iridium 9602 to replace. The unit’s very small form factor and low power signature offer greater flexibility to value-added manufacturers (VAMs) and resellers (VARs) embedding the Iridium 9602 into their products.
SM
How has the marketplace accepted the Iridium 9602?
Patrick Shay
In a word, spectacular. We are working with more than 90 value-added partners who are embedding the Iridium 9602 module into a broad range of GPS tracking, monitoring and remote control solutions. Many of these are dual-mode satellite/cellular devices with least-cost routing software and automatic failover to the satellite data links when out of range of cell towers.
The Iridium 9602 is a game changer for Iridium and our partners. Until now, we have mostly found our SBD M2M applications used in niche markets such as automatic tracking of helicopters and vehicles as well as telemetry from remote scientific instruments. Now, with the smaller, lower-powered Iridium 9602, we are dealing with partner companies serving much broader enterprise and consumer markets.
Probably the most exciting prospect is our entry into the fast-growing personal tracking, messaging and SOS alerting market. Several of our partners, such as DeLorme, Track24, ACR Electronics, NAL Research and Blackbird, have already announced their new Iridium 9602-based handheld devices for two-way tracking and messaging. Others will hit the market over the next few months.
SM
When we last talked with you in 2009, you were involved in forming an industry group to promote standards for personal satellite emergency notification devices (SENDs). Can you give us a report on the progress made in this area?
Patrick Shay
I remain the chairman of the ProTECTS Alliance (an acronym for Promotion of Two-way Emergency Communication and Tracking Systems), which provides a bridge connecting the manufacturers and suppliers of these devices and the global search-and-rescue (SAR) community. One of the primary goals of the alliance was to address the pressing need for minimum standards for these products, especially in how they interface with the SAR first responders who must respond to SOS messages from them.
We formed a close relationship with a Special Committee of the Radio-Technical Commission for Maritime Services (RTCM), which was already working on creation of an industry standard for SEND products. One of our first achievements was to work with the National Search and Rescue Committee (NSARC) to develop a standardized message format for emergency messages meeting the requirements of SAR organizations such as the U.S. Coast Guard, U.S. Air Force and others. I’m happy to report that the RTCM SEND special committee voted at its April 2011 meeting to approve the standard and present it to the industry and related government organizations soon. Our next step will be to address how private, commercially-operated message centers refer SOS calls to appropriate first responder organizations with jurisdiction over the location of each emergency.
SM
You mentioned that the ProTECTS Alliance aims to foster two-way data connections. Why is that important?
Patrick Shay
Two-way communications solves one of their most pressing needs for the international SAR community — reducing false alarms. A return link allows first responders (a) to determine whether the SOS message is legitimate or a false alarm caused by an accidental activation or user misunderstanding, (b) determine the nature of the emergency so they can respond with the appropriate resources in the most cost-effective manner, and (c) reassure the sender that help is on the way.
SM
We see that your satellite replenishment program, Iridium NEXT, appears to be on track for launches starting in 2015. How will Iridium NEXT affect your data services business?
Patrick Shay
Iridium NEXT will enable data speeds up to 1.5 kbps in the L-band, and much higher for certain specialized data applications through the Ka-band feeder links. Importantly, Iridium NEXT will be backward compatible. That means all of the products being brought to market now will be able to operate on the new constellation without modifications.
SM
Lastly, what projects have you completed that bring the broadest smile to your face?
Patrick Shay
Actually, it’s not what we’ve completed so far that makes me smile. It’s the prospects for the future. We are poised at the brink of a growth market with an opportunity to seize a commanding market share. At Iridium we have a spectacular team that is continuing to shape the future of the mobile satellite data communications marketplace.
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