Iridium tees up AWS relationship to expand IoT offerings

Iridium
Iridium's final launch of 10 satellites is planned for later this year. (Iridium)

Iridium Communications has joined the Amazon Web Services (AWS) Partner Network (APN) and is collaborating with AWS on the development of Iridium CloudConnect, which it describes as the first and only satellite cloud-based solution that offers truly global coverage for IoT applications.

Of course, Iridium has been providing IoT services for the last 10 years or so, and IoT represents a big growth segment for the company. The difference now is the Iridium network is joining with the AWS partner cloud, such that any Amazon customer or any Iridium customer will be able to get the benefit of both, straight out of the box.  

“This really moves our core services into what is today, sort of the de facto way of delivering IoT solutions, which is cloud-based,” said Tim Last, vice president and general manager of IoT at Iridium, in an interview with FierceWirelessTech.

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Iridium’s plan is to spend the next six or seven months finishing the development of the service, with plans to launch in the first half of next year.

The company, which uses L-Band spectrum, is currently in the home stretch of an ambitious $3 billion effort to replace its entire original satellite constellation with new satellites, known as Iridium Next. So far, seven launches have taken place with launch provider SpaceX, delivering 65 new satellites to Low Earth Orbit (LEO), with the final launch of 10 satellites planned for later this year. Once completed, a total of 75 Iridium Next satellites will be delivered to space, with 66 in the active constellation and nine serving as spares. 

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Iridium’s satellites can be used to fill in terrestrial IoT coverage; AT&T is using them through a deal that’s arranged through Globecomm. But Iridium isn’t trying to compete with terrestrial cellular, Last said. Rather, its niche is being able to deliver IoT for the 80% of the globe that doesn’t have cellular coverage: maritime, aviation and so on.

It’s also not trying to say it’s cost-competitive with cellular. Whereas cellular’s average IoT ARPU might be in the low single digits, Iridium garners something like $12 or $13 ARPU for its core IoT service. While that is coming down, “it’s also a premium that we drive a lot of value from,” Last said. “We seek out applications where they can sustain that kind of growth.”

The ultimate cost depends on the applications and service. Iridium focuses on mainly critical communications—safety of life, large industrial IoT applications and the like. It adds value when terrestrial coverage goes down, for example. A lot of applications Iridium serves—maybe 40-50%—are complementary to cellular, Last said.

“We’ve clearly got to be cost competitive for those companies that want satellite coverage,” he said. “If you say, ‘are we competitive with the cheapest cellular SIM-based IoT service?’ I would say no, we’re not competitive in that way, but that’s because we’re providing connectivity where those guys can’t.”

One thing is clear: In this world of global coverage, with a variety of networks and fast pace of technological change, “people need options and complementary communications solutions,” he said. “It’s great that we can see all this investment in cellular and the pace of change, but 2G, 3G, 4G LTE, 5G… The pace of technological change is changing so much and so fast it’s difficult for some of our industrial customers to pick the right technology and know that it’s going to be around.”

Last said he has customers that need to put a solution in the field and want it to be operable for 10, 15, 20 years—that’s how they’re going to get their return on investment. “In many cases, they can’t rely on cellular technology to do that,” he said, noting how 2G networks are being decommissioned in the U.S.

Iridium, which has about 630,000 active devices out in the market as of the end of June, said its IoT subscribers have grown at a CAGR of about 19% over the last three years. But Iridium recognizes it doesn’t reach everywhere, so it’s working with a number of companies that can offer complementary communications.  

“We are looking to expand and partner with a number of other companies that can complement the solutions that we have on our network,” he said, one of which was announced last year with a company called Hiber of The Netherlands. It’s launching a bunch of small satellites to deliver IoT. “We’ll partner with them to bring those services to our customers,” he said.