[Via Satellite 10-30-2015] Growth for Machine-to-Machine (M2M) in the industrial market is healthy for Iridium<\/b>, but slower than it could be as the dollar continues to gain strength and the oil and gas industry sees a steep decline in profits in recent months. The company posted $106 million quarterly revenue, a 1 percent decline over the same period last year, due to a dip in commercial services and engineering and support revenue; meanwhile, its numbers were bolstered by a strong government service revenue for the quarter. The commercial customers Iridium did add during the last three months, however, it attributes to the M2M sector, which looks to be a vigorous growth market for the company.<\/p>\n
\u201cWe added 11,000 net commercial customers during the quarter, with the gain coming almost entirely from M2M customers. Commercial M2M data subscribers now represent 49 percent of billable commercial subscribers \u2014 an increase from 47 percent during the year-ago period,\u201d said Iridium CEO Matt Desch during the company\u2019s third quarter earnings call on Oct. 29.<\/p>\n
Desch admits to headwinds the M2M industry is facing, including a $1.5 million concession the company gave to a large oil and gas customer, but believes the company is still making impressive progress, particularly in terms of booking heavy-equipment Original Equipment Manufacturer (OEM) customers.<\/p>\n
\u201cWe now have service in place with five of the top 20 heavy-equipment OEMs, and are in trials or contract discussions with more than five more \u2014 which is great, given that this is a fairly new area for us. We feel good about our array of<\/p>\n
M2M solutions and our position as a mission-critical provider of satellite data and telemetry to the growing [Internet of Things] IoT world,\u201d said Matt Desch.<\/p>\n
While the number of subscribers is up for IoT and M2M, they haven\u2019t yet pushed profits skyward for the company.<\/p>\n
\u201cM2M revenue was flat versus the year ago quarter. M2M subscribers were up 12 percent but [Average Revenue Per User] ARPU was down 9 percent,\u201d said James McIlree, senior research analyst at Chardan Capital Markets in an emailed release.<\/p>\n
McIlree attributes the slowdown in M2M and a 3 percent slump in Voice ARPU to a strong dollar and weak oil, something Desch admits is likely slowing commitments from M2M OEMs.<\/p>\n
\u201cThere\u2019s more [OEM customers] in the pipeline as far as people that we are talking to right now and anyone that is looking to do business around telematics is talking to us right now in the OEM space. Notwithstanding, of course, a lot of them are under a lot of pressure right now, including the largest. But I would say that in almost every case that I have seen \u2026 telematics is maybe a way through the headwinds that they\u2019re perceiving right now due to oil and gas.\u201d<\/p>\n
\u201cWe haven\u2019t seen any programs necessarily change or anything that we are talking about with people stop. It probably slows things down slightly and lowers the absolute numbers that we would be expecting,\u201d said Desch, noting that the new space is still seeing growth, which the company chalks up to a win.<\/p>\n
With the M2M market having changed and the growth rate coming down sharply compared to the 15-percent growth Iridium has seen in the segment in recent years, Desch says the company will have to \u201cwork through\u201d the issues in oil and gas in order for Iridium to continue seeing robust growth in the segment.<\/p>\n
\u201cIt\u2019s not a technology issue for us,\u201d admits Desch. \u201cIt\u2019s more continued diversification in the new segments. It\u2019s the heavy equipment OEM space. It\u2019s going after \u2026 in some competitive areas, where there seems to be some interest in some of the people who are already into telematics maybe diversifying into Iridium. It\u2019s into other areas like fleet management,\u201d he said, referencing the company\u2019s recent win with South African-based MiX Telematics<\/b>, a company that provides fleet and mobile asset management solutions, which announced a partnership with Iridum for fleet communications to offer MiX\u2019s subscribers across 120 countries Iridium\u2019s network and M2M solutions. Desch sees this as a marker for long-term growth in the M2M sector.<\/p>\n
\u201cWe\u2019re going to have to kind of work through [the slowdown] because there are a couple of oil and gas players that are quite large in our portfolio suddenly sort of deflating all at once and the natural growth around it is going to overwhelm that over time, we just need a little time to work through that,\u201d said Desch.<\/p>\n","protected":false},"excerpt":{"rendered":"
[Via Satellite 10-30-2015] Growth for Machine-to-Machine (M2M) in the industrial market is healthy for Iridium, but slower than it could be as the dollar continues to gain strength and the oil and gas industry sees a steep decline in profits in recent months. The company posted $106 million quarterly revenue, a 1 percent decline over […]<\/p>\n","protected":false},"author":1,"featured_media":54510,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"inline_featured_image":false,"footnotes":"","_links_to":"","_links_to_target":""},"categories":[2],"tags":[],"class_list":["post-72786","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-news"],"acf":[],"_links":{"self":[{"href":"https:\/\/starpath.global\/blog\/wp-json\/wp\/v2\/posts\/72786"}],"collection":[{"href":"https:\/\/starpath.global\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/starpath.global\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/starpath.global\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/starpath.global\/blog\/wp-json\/wp\/v2\/comments?post=72786"}],"version-history":[{"count":0,"href":"https:\/\/starpath.global\/blog\/wp-json\/wp\/v2\/posts\/72786\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/starpath.global\/blog\/wp-json\/wp\/v2\/media\/54510"}],"wp:attachment":[{"href":"https:\/\/starpath.global\/blog\/wp-json\/wp\/v2\/media?parent=72786"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/starpath.global\/blog\/wp-json\/wp\/v2\/categories?post=72786"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/starpath.global\/blog\/wp-json\/wp\/v2\/tags?post=72786"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}