DoD’s Latest Unlimited Service Deal Renewal Almost Complete: Iridium

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After two short-term expansions to a 2013 agreement, Iridium anticipates finishing negotiations with the U.S. administration for a more profitable connectivity agreement. Matt Desch—Iridium’s CEO—said that the company expects to settle on a multi-year renewal of its EMSS (Enhanced Mobile Satellite Services) contract with the U.S. DoD (Department of Defense) in the next 30 Days. Virginia-based Iridium supplies unrestricted voice and data satellite communications assistance to the DoD through a 5-Year EMSS contract granted in late 2013. When that contract of $400 Million was concluded in October, the DISA (Defense Information Systems Agency) compensated $44 Million to add an additional 6 Months.

On April 9—prior to the extension expired—the DoD inked a 1-Month, $8.3 Million extensions to close the gap to a fresh multi-year agreement. While addressing an earnings call, Desch said that there was not any particular problem causing the protracted conciliations. The original 2013 agreement “took time till the last minutes,” he said. Iridium executives have averted estimating the worth of the restitution beyond that it would be higher on a yearly basis than the concluding year of the 2013 agreement, which was $88 Million. Desch stated the new EMSS deal should outcome in “revenues surging nicely and the DoD’s charge per user lowering markedly.”

Recently, Iridium was in news as the satellite company reports two digit revenue for the first quarter and subscriber growth. The company reported total proceeds of $133.7 Million for the first quarter, which comprised of $107 Million of service returns and $26.7 Million of proceeds related to equipment sales and engineering and projects. The total revenue surged by 12% from the same period of 2018, whereas the service revenue increased by 19% from the year-ago period. The service revenue—which illustrate main recurring income from Iridium’s increasing subscriber base—was nearly 80% of total proceeds for the first quarter of 2019.

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