Most satellite D2D services will fail, predicts Iridium CTO

Most direct-to-device (D2D) satellite companies now hitting the market are likely to fail, Iridium CTO Greg Felton has warned.

Speaking in an online forum Tuesday, he said the new players are yet to test out their business models. “Right now there’s a lot of investment and a lot of different ideas being tried out and most of them will fail,” he said. “Most will eventually run out of money because they won’t be able to generate enough cash flow to keep getting investments. With the cost of capital going up we’ll probably see that sooner rather than later.”

Felton pointed out that historically most satellite operators go through bankruptcy – including his own company, which became one of the tech sector’s most notorious failures when it collapsed in 1999 after burning through $5 billion.

He said spectrum availability and the uncertain business case would be major impediments to the growth of the business. “It’ll be 2030 before we know how big this market is.”

However, James Alderdice, Asia-Pacific vice-president for startup Lynk Global, said the company believes its business case is clear for the next two to four years.

Ready to go live in April

“Our service is a roaming service – fundamentally a plug-in for mobile operators to add to their network. When phones are out of coverage they will connect to our satellite service,” he told the forum. Lynk will be ready to go live with its text message service with 25 operator partners in April, he said.

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