This morning, Rocket Lab, the launch company best known for the small-payload-carrying Electron rocket and its coming "big brother" Neutron, announced that it is acquiring the satellite communications company Iridium. Iridium was first making headlines building satellites for Motorola in the 1980s, but now is a satellite network company.
The deal pairs the launch company, founded and led by Peter Beck, with a decades-old profitable satellite company whose network of 80 satellites in low-Earth orbit provides telecommunications services.
“We believe this will be one of the most transformative deals in the space industry,” Beck said in a short promotional video announcing the deal. “It’s the ultimate combination for growth.”
And watch that video. Rocket Lab CEO Peter Beck is always worth listening to.
The deal, made for cash and shares of Rocket Lab stock, values Iridium at about $8 billion.
As we regularly say, "you don't need a Ph.D. to see..." that this is a very good way for Rocket Lab to enter the “space applications” business making them another step closer to being an alternative to SpaceX, now far ahead in the communications sector with Starlink and the much larger Starship seemingly close to being deployable. This is where the money to be made in space systems is to be found.
“This is a deal where one plus one equals three,” he said. “One being Rocket Lab—we have unfettered access to space and the ability to build spacecraft at scale. We also do missions for people that matter. Then you think of Iridium, they have an already operational constellation; spectrum, and not just any spectrum but extremely valuable spectrum; millions of customers and they’re a profitable business. The result of these two things is a fully integrated, self-launching space superpower.”
The "extremely valuable" spectrum that Beck refers to Iridium having is L-band. Loosely defined, that's in the 1.0 to 2.0 GHz range. A lot of existing cellphone technology as well the GPS satellites operate in this window. Iridium is also developing a commercial position, navigation, and timing service as an alternative to GPS.
Iridium is a company with a long history. First founded in 1998, it had to be rescued from bankruptcy only a couple of years later by the US government due to the difficulty of building and launching a commercial satellite communications network. Arriving as CEO in 2006, Matt Desch developed a plan for a next-generation constellation and worked with SpaceX and its Falcon 9 rocket to get it launched in the 2010s. For a time, Iridium was SpaceX’s most important commercial launch customer. Those satellites generate the bulk of Iridium’s revenue today.
Rocket Lab's Peter Beck says that in order to become a “self-launching space superpower,” they need to get their Neutron rocket development completed and the sooner the better. The first mention of Neutron that I can find searching through old posts, was in December of 2021, so 4-1/2 years ago. They've been saying "we'll be flying real soon, now" since 2024, and Eric Berger of Ars Technica says that while they're saying the first launch will be this year, "... given the testing issues, it’s not even certain that Neutron will make its debut in 2027."
Rocket Lab released this picture of what they call the "Hungry Hippo" fairing
that appeared here on
December 3, 2021. Once you've seen that, you can't unsee the kids' hippo game.
While there's a lot of reasons to respect this acquisition and merger, there's also still a list of things they need to accomplish to become the company they apparently are aiming to be. Seeing the Neutron fly would be the big step.
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