Iridium Communications has contracted Thales/Finmeccanica joint venture Thales Alenia Space to design and construct satellites for its second-generation Iridium NEXT constellation, which will be capable of supporting higher-bandwidth communications for aircraft.

Bethesda, Maryland-based Iridium's fixed price contract with Thales Alenia Space provides for the construction of an originally-planned 72 operational satellites and in-orbit spares, plus an additional nine ground spares, which provide greater risk mitigation with respect to the new constellation, says Iridium. Launch of the first satellites is expected to begin in the first quarter of 2015.

"As a result of the expanded scope of the project, the total cost of Iridium NEXT, including all costs associated with development, manufacture and launch of the constellation, is now anticipated to be approximately $2.9 billion," says Iridium.

The company says it has entered into an authorisation to proceed (ATP) arrangement, which allows Thales Alenia Space to commence work immediately on the development of satellites prior to completion of the financing.

French export credit agency Coface, meanwhile has issued a promise of guarantee, which commits to cover 95% of the $1.8 billion credit facility for the project.

The Coface guarantee commitment is not conditioned on Iridium raising any further debt or equity financing. It enables Iridium "to secure attractive and flexible low cost financing for the project", says Iridium CEO Matt Desch. "Based on the amount of this guarantee, we expect Iridium NEXT to be fully funded when the financing is finalised this summer."

Iridium's current global constellation of 66 low-earth orbiting (LEO) satellites supports voice services on aircraft, and for other industries. Its new OpenPort service, which was originally engineered for the maritime market and can support data rates of up to 128 kbps, is being adapted by JetBlue Airways subsidiary LiveTV to provide airlines with a cost-effective, pay-per-megabyte plan called Kiteline World.

Iridium NEXT, is expected to provide data rates of up to 1.0 mbps, and opens up the possibility of supplying airlines with higher-speed service than currently on offer from the company, while retaining low costs, according to Iridium.

Source: Air Transport Intelligence news