Shares of mobile satellite services provider – Iridium Communications Inc. IRDM – rallied around 7.4% in yesterday’s trading session, following the successful launch of Falcon 9 rocket by commercial spacecraft specialist SpaceX.
Iridium is counting on these commercial launches for its own next-generation satellite network – NEXT. The NEXT constellation has 66 satellites that Iridium had been developing in Arizona. Notably, SpaceX is entrusted with delivering the bulk of satellites for the Iridium NEXT constellation into their low Earth orbit.
The Iridium NEXT satellite network will be the only satellite network presenting actual global coverage with better bandwidth, enhanced data speeds and continual service. Further, Iridium hopes that the satellite network will radically improve its prevailing capacity in enabling customers to communicate from remote locations around the world through voice and data. Notably, the satellite network is scheduled for launch this year and is slated to run through 2017.
Meanwhile, ORBCOMM, Inc. ORBC, whose 11 OG2 satellites went into orbit on SpaceX's rocket, also closed 10.4% higher yesterday. The satellites are designed to provide commercial machine-to-machine messaging and automatic identification system (AIS).
A SpaceX launch crash in June earlier this year had elevated apprehensions that Iridium's planned deployment of the Iridium NEXT network might face elongated delays.
However, we believe that the recent success of the SpaceX Falcon 9 reduces the chances of further delay in Iridium’s NEXT network launch. Thus, the SpaceX launch is likely to strengthen Iridium’s market position and result in considerable gains for the company.
Notably, Iridium provides mobile voice and data communications services to businesses, the U.S. and foreign governments, non-governmental organizations, and consumers worldwide via its constellation of 66 in-orbit satellites, seven in-orbit spares and related ground infrastructure.
Iridium currently has a Zacks Rank #2 (Buy). Other favorably ranked stocks in the sector include InterDigital, Inc. IDCC and Motorola Solutions, Inc. MSI. While InterDigital sports a Zacks Rank #1 (Strong Buy), Motorola Solutions carries the same Zacks Rank as Iridium.
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