Iridium has been experiencing continual growth in the number of it’s subscribers for the last few years. This growth has sped up since March 2007. On the 15th of November Iridium announced its 2007 third quarter results.
The second quarter results showed an increase in the number of subscribers to 203,000 (from 183,000 in March 2007). Now the company has reported 225,000 users. If this growth rate continues, Iridium will probably reach the 250,000 subscriber mark by the end of the year. Thanks to this growth, Iridium’s revenue in the third quarter reached $74.2 million, while its EBITDA was $22.5 million.
The amount of new subscribers Iridium has been gaining through each quarter, for the last two years, can be seen on the chart below.
What is the cause of such increase – especially in the second and third quarter of 2007? Surely the satellite phone market in itself is growing, as this has been the trend for the last few years. There is also a seasonal pattern in the satphone market that cannot be neglected. The companies tend to gain new subscribers in larger amounts in the summer season (that is, summer in the Northern Hemisphere, where most clients are located).
Yet Iridium has another helper. This has been no one else but the company’s main rival, Globalstar, which is having growing problems with maintaining its own satellite phone service. This fact has been indirectly admitted by Iridium’s CEO, Matt Desch, who stated that Iridium’s growth in subscribers and revenue in the third quarter is due to “grabbing market share from competitors”.