M2M adoption helps Iridium to grow profits

Satellite operator Iridium says growing interest in M2M services boosted sales and profits during the first three months of the year.

The company’s revenues rose by 10%, to $98 million, compared with the first quarter of 2013, while net income increased from $14.9 million to $16.5 million over the period.

Iridium (McLean, VA, USA) also ended the quarter with 674,000 billable subscribers, compared with 621,000 in March 2013, and said the strength of its M2M offerings was partly responsible for the increase.

“We reported our best all-around quarter in nearly two years,” said Matt Desch, Iridium’s chief executive. “Total service revenue grew 7% year-over-year with contributions from many of our key sectors, while our equipment business regained its footing, posting a 16% revenue gain on higher overall unit sales.”

“We're encouraged by our solid start to 2014, and are poised to build on this momentum … by capitalizing on opportunities in our maritime business, and further penetrating the heavy equipment OEM segment in the M2M market,” he added.

Drilling down into results, Iridium said that commercial service revenues grew 7%, to $57.4 million, with commercial voice and data subscribers up 2%, to 338,000.

Commercial M2M data subscribers grew 19%, to 283,000, while average revenue per user in this segment remained stable at $16 a month over the period.

However, M2M also boosted government service revenues, with the number of M2M data subscribers in this market rising by 24%, to 21,600.

Iridium drew particular attention to the potential for its yet-to-be-launched Aireon global aircraft surveillance service, a joint venture involving NAV CANADA, ENAV, the Irish Aviation Authority and Naviair, with support from the US Federal Aviation Administration (FAA) and suppliers Harris Corporation (Melbourne, FL, USA) and Exelis (McLean, VA, USA).

“Aireon … continues to hit key milestones, demonstrating the importance of real-time, global aircraft surveillance in a connected world,” said Desch. “Once operational, this joint venture will offer transformative benefits to the aviation industry including fuel savings over oceanic and remote areas, more efficient flight routing and management, and in cases like the recent Malaysian Airlines Flight 370 tragedy, the value of being able to monitor aircraft anywhere around the globe.”