Iridium CEO outlines plan for expansion: Defense Department satellite voice-communications traffic skyrockets after Sept. 11.

The DEFENSE DEPARTMENT is expected to extend its contract for Iridium satellite communications services after the current two-year agreement expires in 2003, officials said. Company executives said that traffic on the Pentagon's secure satellite communications gateway has quadrupled since September 11.

"Given the success of the Iridium program to date, I would be extremely surprised if we didn't continue to provide service" after the contract expires next year, said Gino Picasso, chief executive of Iridium Satellite LLC, in Arlington, Va.

Iridium's predecessor firm collapsed in 1999. The Defense Department stepped in with a $72 million contract to save the constellation of 66 low-earth orbiting (LEO) satellites from being destroyed and the company survived, under new ownership. The Pentagon's contract provides unlimited remote communication access for 20,000 U.S. government users around the world. Iridium also built a secure gateway in Hawii, separate from its commercial gateway in Tempe, Ariz.

Betsy Flood, a spokeswoman at the Defense Information Systems Agency, said that the Defense Department gateway has logged 348,724 calls between September 2001 and March 2002. That amounts to about 1.1 million minutes. The average telephone call is about three minutes long. There are approximately 8,100 users of the Iridium phones, 8,100 users of the pagers, and 7,100 who transmit both voice and data, said Flood.

Picasso, who worked in the international satellite networking and

telecommunications sector for 20 years, joined Iridium Satellite LLC soon after the Defense Department contract was signed in 2001. A Wharton School of Business graduate who grew up in Lima, Peru, Picasso is responsible for Iridium's short and long-term business strategies.

He said satellite phones and pagers are valued by the military services, because "the first thing that goes in a disaster is communications infrastructure.

During overseas deployments, he added, it often is unrealistic to be dependent on the communication infrastructure of a host country. "When you're doing military operations, you must have independence of terrestrial infrastructure," Picasso said. Iridium communications require line-of-sight to the satellite.

A study by the Aerospace Corporation concluded that the constellation's expected life will extend through mid-2012, when initially it was thought to extend only through 2007.

The satellite traffic increase after September 11, "accelerated all of the programs that we already had in place. ... I don't think anyone really understood how important independence from the ground infrastructure would become."

Picasso stressed that remote voice access is not the only capability of the Iridium constellation. "Everyone associates Iridium with the handset. But it has many more uses than that. We have fixed mount units, that can provide communications in a land-based location, and it also can go into ships. We have modules that are fairly unique, that can fit on helicopters. We not only provide voice; we provide data, with access speeds of about 10 kilobits per second. And we also have short-burst messaging, which allows us to be able to do remote sensing and monitoring, which opens up a whole new world of capability."

The antenna is small enough that the communications systems can be used inside buildings. "We demonstrated this at the Adams Mark Hotel (in Washington D.C.). We put it (the antenna) on the roof of the hotel, and we were down 12 stories below," getting a strong signal through 12 reinforced concrete floors.

To increase the utility of the system, Iridium deployed five in-orbit spares earlier this year, which were launched by the Boeing Delta II vehicle. Two more in-orbit spares are set for launch this month, bringing the total number of in-orbit spares to 14. The benefit of in-orbit spares, in "special storage orbit"--at 360 nautical miles as opposed to the regular constellation orbit of 430 nautical miles--is that they can be moved from low orbit to high orbit as necessary, Picasso said. "If one of the satellites fails, what we will do is move the satellite from storage orbit into the regular orbit to replace the failed satellite."

The spare can become operational as soon as one of the regular satellites malfunctions.

Part of Iridium's new business plan is to sell communications services to foreign nations friendly to the United States, said Picasso.

"We have deployed units with other nations. All of our allies have adopted (Iridium Satellite LLC technology) in one way or another," he said.

Picasso explained that one of the company's two commercial gateways is in Fracino, Italy. "It has the capacity for a much heavier volume of use," he said. The company has made headway in the commercial sector, particularly with customers in the oil and gas exploration business.

The short-burst messaging technology is marketed as an oil well monitor, which could alert managers to breaks in a pipeline, for example. Picasso said that 30 percent of Iridium's commercial business comes from sub-Saharan Africa, where there are opportunities for the mining industry, but very little in the way of land-based communications.

Picasso explained that Iridium selects potential customer countries by researching gross domestic product indicators such as "teledensity." The density of telephone services in remote locations, for example, indicate independent investment and higher production rates, which would make the atmosphere favorable for satellite communication options. "Teledensity is a function of GDP. Greater nations have greater teledensity. For example, Mexico and Turkey have similar GDPs per capita, yet Mexico has a lot lower teledensiry than Turkey."

Another important factor is the geographic dispersion of a population. "It is expensive to run a wire a long distance. It is expensive to put cellular towers in sparse populations," he said. "The fact is that there are reasonably developed nations that still need infrastructure in remote locations."

Iridium, additionally, could provide services in low-reledensity countries through telephone companies themselves.