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What 'Iridium Effect'


Mojave - September 14, 1999 -
A question that we at Rotary Rocket Company are seeing a lot of right now is: "What effect, if any, will the "Iridium Effect" - Iridium and ICO's bankruptcy - have on the efforts of new entrepreneurial space launch firms to raise money in the financial markets. Does Rotary think this will make Wall Street and investors more hesitant to fund new launch concepts?"

Rotary Rocket Company's response to the so-called "Iridium Effect" is that we are sure the knee-jerk reaction from the financial markets will be that funding for the nascent reusable space vehicle companies, such as Rotary Rocket Company, will be harder to get in the short-term. Probably much harder to get in the immediate time-frame. But that will be simply because the financial markets will be panicking instead of thinking.

The key point is that satellite telecommunications ventures such as ICO or Globalstar, even Iridium, are potentially hugely profitable even with today's ridiculously high launch costs if only they could actually get to develop their market.

People in general, and financial people in particular, have not yet woken-up to the fact that the future of telecommunications is personal wireless telecommunications. Here, at Rotary, we call personal wireless telecommunications "the undiscovered country," and by this we don't just mean voice but data, internet, positioning - you name it, it will go wireless. We believe that everything will go wireless simply because societies become increasingly more mobile as they evolve. So telecommunications will have to go mobile just to keep-up with their customer's demands.

Hard-wired connections will remain, of course - mostly in the "old" or legacy technology environments of the US or Western Europe - but new technology environments, for example the rest of the world, where most people live, will go directly from none or inadequate telecommunications to a plethora of personal wireless telecommunications options.

The best way to achieve this globally, as opposed to thinking in narrow territorial limits as most westerners do, is through satellites. Nobody in their right mind is going to wire the emerging nations when we can do the same job faster, better and cheaper - much faster, much better and much cheaper - using satellites - and get fully mobile telecommunications as well.

Wake-up people, Wired Magazine got it wrong. We are all going to be connected but unplugged. This will happen. Depend on it.

We know of several LEO satellite telecommunications ventures that are getting ready to go right now. They have learned from all the mistakes that have been made in this business. They will not repeat them. They will succeed. They will make a lot of money. A heck of a lot of money.

With low cost launch services that RLV companies such as Rotary Rocket Company could provide, profitability of these satellite-based ventures would be assured right from the get-go.

So the logical thing for the financial markets to do right now is to heavily fund the nascent RLV companies like Rotary Rocket Company. The need is there. The market is there. The technology is there. The money is there. The future is there. Frankly, the only thing that is not there right now is a financial community with balls.

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