Boston, MA 10/03/2013 (wallstreetpr) – Iridium Communications Inc. (NASDAQ:IRDM) is pulling out all stops to pull itself out of the rut since its disastrous 2Q results announced on August 1. On the announcement of recording revenue of $94.7M which was lower than the analyst estimates, the share price of the stock tanked close to 20% to reach $6.85 from its July trading prices which were hovering around its 52 week high valuation of $9.05. This promoted the commercial satellite maker to bring in a slew of changes in its management structure. It has also been launched major new ties up and new product offerings in its bid to regain its lost momentum.
It is in this context that one needs to look at October 1st in principal “tie up” announcement between IRDM’s fully owned subsidiary, Iridium Satellite LLC and the “Defence Information Systems Agency” (DISA) which is a standalone unit of U.S. Department of Defence. This annual contract will be in vogue till October 30’2014 and replaces the existing contract whose extended term expired on September 30.
As part of the comprehensive agreement whose original term was till March 31, IRDM subsidiary Iridium Government Services LLC, was providing DISA with Enhanced Mobile Satellite Services. As part of contract Iridium was taking care of the maintenance of network Gateway and Support Services of DISA. Additionally Department of defence was also accessing airtime and support services of Iridium from time to time.
DISA had extended these contracts till September 30 and is negotiating with Iridium Satellite LLC to put into place a new agreement to replace the previous GMSS contract. The October 1 announcement indicated that Iridium Satellite and DISA have reached an in principal agreement and are likely to conclude a new agreement by October 21, 2013. In the interim, Iridium Government Services continues to provide services to DISA.
