Q&A: Iridium CEO Matt Desch Reflects on SatCom Industry History, Future Trends

Q&A with Iridium CEO Matt Desch

Tysons-headquartered global telecommunications company Iridium celebrated its 25th anniversary this November with events held at Capital One Center in Tysons, as well as in Tempe, Arizona. Iridium employees, the company’s original founders and early investors, partners, and distinguished guests gathered to mark the historic occasion.

Founded in 1998, the first Iridium call was made from then Vice President Al Gore to Gilbert Grosvenor, the great-grandson of Alexander Graham Bell and Chairman of the National Geographic Society. Nine months later the founding company went into Chapter 11 bankruptcy. Yet the company turned it around through a series of strategic moves, and today Iridium Communications net worth is $4.55 Billion, according to Macrotrends.

“We are excited to celebrate and reflect on the past 25 years while looking toward the future and leading new innovations in satellite communications. While our technology is still groundbreaking, it’s been the people in and around Iridium that have made the company the success that it is today,” said Matt Desch, CEO, Iridium.

Matt Desch, CEO, Iridium Communications Inc. © 2020 | Kristina Sherk Photography

Desch sat down with the Fairfax County Economic Development Authority during the anniversary festivities to answer a few questions. Here’s an abridged version of his comments during which he talked about the company’s history, anticipated future trends in telecommunications, and why Fairfax County is a great place for the company’s headquarters.

FCEDA: Please provide a brief overview of what your company does.  

Matthew J. Desch: Iridium satellites are used for worldwide voice and data communication. Iridium is still the only truly global satellite communication company that focuses on delivering voice data and Internet connections to people and things on the move. We focus particularly on personal communications, that is, satellite communications that can be boiled down to the size of your hand.

Iridium focuses on five main business areas. The first one is satellite phones for people on land that need us, for example, scientists or first responders. We are also utilized in situations where communication is not available or denied, including during natural disasters and humanitarian emergencies.

Secondly, in maritime Iridium is installed on nearly 250,000 ships for crew safety and for purposes such as helping prevent illegal fishing through catch reporting regulatory systems. The third area is aviation, and Iridium is used on more than 70,000 aircraft, helicopters, medevacs, etc., allowing the pilots to communicate through either air traffic control or to their home office.

The fourth focus is the Internet of Things (IoT). It is used for tracking and monitoring of all kinds of assets — and that’s the majority of our subscribers. The fifth area is the U.S. government, which is about 20 percent of our business, primarily the Department of Defense, but also every other U.S. government agency.

FCEDA: How many satellites do you have in operation right now?

The Iridium satellite constellation is currently a system of 80 satellites, 66 of which are active satellites and 14 that function as in-orbit spares.

We completed Iridium Next, our second-generation network upgrade campaign, about two years ago. It was a $3 billion network. Our first-generation network lasted over 20 years.

FCEDA: Iridium was founded 25 years ago. But how did Iridium pioneer SatCom from the inception of the industry?

Matthew J. Desch: We were actually founded in 1987 by three engineers from Motorola.

It was during the very early days of cellular, which started in 1985 or 1986 with the very first systems. And while some people were using their first giant phone, they were already envisioning creating a phone that could work anywhere on the planet. They pitched that idea. It was an audacious idea. No one except the U.S. and Russian spy agencies had low orbiting satellites in those days. Certainly, no commercial companies did.

They [Iridium founders] ended up raising lots of money and started a Space Race during the 1990s. The Iridium company name was announced in 1991. A lot of copycats and competitors subsequently emerged.

Billions of dollars were raised by the company, and it went public on the New York Stock Exchange and rocketed up. The whole original network was launched between 1997 and 1998. And what we’re really celebrating is November 1st, 1998, when they opened the network up for service for the first time. We thought that would be the appropriate day to really celebrate — because that’s when money started to flow in.

Not enough, though, because the company went bankrupt around eight months later.

But the company still started service, including for the U.S. Department of Defense. Iridium’s former chairman Dan Colussy, who is 92, and is in attendance at the Tysons celebration today, is credited with bringing Iridium out of bankruptcy in 2001. And that’s when the new company was formed.

It started growing very quickly and became cash flow positive in two or three years after that. And it’s grown from one subscriber to 2.25 million today. Iridium has gone from being bought for $25 million in 2001 to being a multibillion-dollar market cap company today.

FCEDA: What are some of the highlights of your career as CEO at Iridium?

Matthew J. Desch: When I joined the company as CEO in 2006, the first-generation Iridium network, which was built and then launched in 1998, was getting old and no one knew at that time how long it might last. And while we were growing, the issue was we knew a new network would cost us $3 billion, and we didn’t have 3 billion. So, I subsequently took the company public in 2009 on Nasdaq. We raised the debt. We created some joint ventures, like with Tysons-based Aireon to track aircraft. We contracted out to SpaceX for rocket launches, to Thales Alenia Space for satellites, and then were finally able to replace our first-generation network.

By 2019 all the new satellites needed were up. The original satellites which were launched 25 years ago were de-orbited safely and burned up in the atmosphere. The satellites in space today are what we call Iridium Next. The network is expected to last into the mid-to–late 2030s.

In the meantime, we have kept inventing new services and finding new partners. Many of the companies in Fairfax County are partners of ours. We have around 500 companies right now that are our license partners that sell our services to their customers. We don’t go directly to the end customer.

FCEDA: How have you seen the satellite communications industry evolve over the past 25 years?

Matthew J. Desch: When we launched the network in 1998, we had created a boom of investment by companies trying to copy us. That was all during the dot-com boom and the Internet bubble. And then of course, for the next ten years or so, as we emerged from bankruptcy, it was a quiet period of time in the industry because everybody was afraid that maybe there was something wrong with space.

Starting about 2010, which I think had more to do with this company called Skybox Imaging that got sold to Google, but really SpaceX with the new Falcon 9 rocket, that put all our new satellites into space, sparked a whole new investment phase. And over the last ten years or so, there’s been massive growth in the space industry, lots of new networks, new technology, and new rockets. It has opened up space in a way that it never had been before.

FCEDA: What do you think is next for the industry in the short term or long term?

Matthew J. Desch: The lines are blurring. All of the networks that used to be satellites were expensive and big. Satellite devices required a giant dish and power, and it was expensive. In the last few years, it has become more democratized. Iridium kind of led the way, making a personal communications device.

But now other companies are embedding the technology into things like mobile phones. Mobile phones are coming together with satellite technology so that users can communicate directly from their phone in their pocket. And they don’t even need to buy a satellite device. It is becoming less expensive, and the expectations of the world have grown so dramatically.

FCEDA: Why is Fairfax County a great place for your headquarters?

Matthew J. Desch:  When I got here 16 years ago Iridium was in Montgomery County, Maryland. As the company was going public, I wanted to move to what I believed to be the heart of the high-tech corridor, both for the growth that we would expect, the kind of employee capabilities that we would need, as well as all the partners that we could be working with. So, I moved the company over to Tysons just about the time we went public 13 years ago. We think this is a dynamic area. Our employees can get here from anywhere, whether they choose to live in major markets like D.C. or out in the country. We have great universities, we have high tech partners, and we have access to one of our largest customers here — the U.S. government. So, it is a perfect nexus for a company and many other space companies are in the area. And it is a great environment to interact and work and has proven to be a spot that we do not plan to move from.

Iridium headquarters in Tysons, Virginia. (Photo credit: Iridium)

FCEDA: Do you think this is a good area for accessing talent for your company?

Matthew J. Desch: Absolutely. We don’t have a hard time attracting talent. We have grown quite a bit. We hired 200 people last year, and about 150 people as of today that have joined us this year. And for a company that has about 750 employees, that’s a major percentage of year over year growth. We have two locations here in Northern Virginia: we have our operations center out in Leesburg, Virginia and our headquarters in Tysons. Our other key locations are in Tempe and Chandler, Arizona. Half of our employees are in either of those two places.

In Northern Virginia we get great employees who graduated from Virginia Tech, George Mason, American, Georgetown or George Washington, among others. We are also getting a lot of other people with experience in the telecom industry and at high-tech companies.

Click here to find out about careers at Iridium.

It is a growing, vibrant area. And people seem to want to move here. If they’re not here already, hey don’t have a problem moving here.

FCEDA: Do you consider DMV a space hub in terms of the entire country?

Matthew J. Desch: Absolutely, it is. The rocket industry perhaps is more California-based and there are some governmental type companies in California. But I would say D.C. is as strong or equally as strong an area. And a lot of that has to do with the first investor in space, and still the largest investor in space, is the U.S. government. And so, it’ll always be a nexus. But even though we’re primarily a commercial company, we benefit by being so close to the aerospace and defense industries that are in this area. Outside of these two areas, there’s some space hubs in Texas, and some places like Huntsville, Alabama, or the Space Coast in Florida. But I don’t know that there is as strong an area as D.C.. I believe D.C. is surprisingly, possibly the Number One area for the satellite industry and a lot of other aspects about commercial space.

We are not about manned space flight here, per say, but we are about the Defense Department. We’re about the commercial communication companies. We’re about companies that take pictures from space, like Maxar, and a lot of technology companies that support those industries.

FCEDA: Is there anything else you want to say about your celebration today or in general, the 25 years?

Matthew J. Desch: Iridium is a dynamic company. This has been a day, really a week, of reminiscing and celebrating of how far it has been taken over 25 years. For a company that was bankrupt in 1998, we have carved out a unique lane in our industry. We have been very successful. It is exciting to think about what we can keep doing in the next 25 years.