Is Iridium A Friend Of Cellular Phones?

Cellular phones squashed Iridium once, but in its second coming the satellite phone maker and owner of the biggest satellite fleet is relying on them to resurrect their business.

For all their seeming ubiquity, cellular services cover only about 8 percent of the globe, leaving large regions where the only way to communicate is to use a satphone made by Iridium Communications Inc or one of its smaller competitors.

“The need for communication devices and services where terrestrial can’t be there is rising, and as bandwidth needs increase it’s surely helping Iridium,” Macquarie Research analyst Amy Yong said.

Investors have taken notice, pushing up the stock of the company nearly 50 percent over the past eight months.

“It’s a different company, with a prudent and successful financial model,” Raymond James analyst Chris Quilty said.

“They’re growing, they have extraordinarily high barriers to entry and some of the end markets and applications they’re targeting are vast and untapped,” he said.

Unlike its competitors, Iridium’s satellite constellation covers the entire globe, including the poles, and its array of 66 satellites dwarfs the fleets of its rivals. Inmarsat Plc has 11; GlobalStar has eight and is aiming to have 32 in orbit by the year-end; Thuraya has three, with one planned.

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