The US Government is to lease capacity on the Iridium mobile satellite communications system, which has been rescued from bankruptcy by new investors.

The Department of Defense (DoD) has signed a contract to provide unlimited airtime for up to 20,000 government subscribers.

The initial two-year contract is worth $72 million. Including options, the deal could be worth $252 million over the next seven years to Iridium Satellite, the venture capital firm which has purchased the $5.5 billion, 73-satellite system for just $6.5 million. With the DoD underpinning operations, Iridium Satellite says it needs only 40,000 more subscribers to break even.

The DoD says it needs the capacity to relieve congestion on its oversubscribed UHF Follow-On satellite communications system. The Pentagon plans to use the handsets on ships, and for special forces and search and rescue.

Source: Flight International