SpaceX Won Iridium Contract By Sharply Undercutting the Competition

SpaceX's Falcon 9 on the pad at Cape Canaveral. (Credit: Chris Thompson/SpaceX)

SpaceX Undercut Competition To Clinch Head-turning Iridium Deal
Space News

Startup launch services provider Space Exploration Technologies (SpaceX), which has made a habit of turning heads in the industry since it was created in 2002, did so again on June 16, announcing a firm $492 million contract with mobile satellite services operator Iridium Communications to launch Iridium’s second-generation constellation of 72 satellites.

The implied price — $6.8 million for each 800-kilogram Iridium satellite launched into a 780-kilometer orbit — is at a level not seen in the launch industry since Russian and Ukrainian rockets were first introduced into the commercial market in the mid-1990s. These vehicles’ prices have since risen sharply.

“Clearly this is a great deal,” Iridium Chief Executive Matt Desch said in a June 16 interview. “That’s why we wanted to lock in prices as quickly as we could.” McLean, Va.-based Iridium in March made a $19 million payment to SpaceX to guarantee the prices in advance of the full contract.

To put SpaceX’s declared intentions in context, an official with one non-U.S. company planning a telecommunications satellite intended for geostationary orbit 36,000 kilometers over the equator said he recently sought price quotes from SpaceX, from the Indian Space Research Organisation and from China Great Wall Industry Corp. SpaceX, he said, was the least expensive of the three.

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