Rocket Lab is buying Iridium’s satellite network for $8 billion to take on SpaceX

Rocket Lab, the space company best known for its small satellite launcher Electron, has announced plans to acquire Iridium Communications for $8 billion. The deal will combine Rocket Lab’s launch services and spacecraft manufacturing with Iridium’s satellite-based communications network, putting it in a better position to challenge SpaceX. Iridium offers communications services to over 2.5 million subscribers around the globe. Its users tap into Iridium’s constellation of 66 low-Earth orbit satellites and L-band spectrum to maintain contact with people on ships, aircraft, and in other remote locations. Iridium partnered with SpaceX to launch its constellation of NEXT satellites in 2019. In a video about the acquisition , Rocket Lab CEO Sir Peter Beck says the deal will offer a “shortcut” for the company to build a satellite network. “They have highly valuable spectrum, which is very difficult to come by,” Beck says. “They have millions of customers, and, of course, they’re a trusted government provider.” Beck adds that it’s a “highly profitable business” and that the company is “not investing in hopes and dreams.” The move mirrors SpaceX’s Starlink push , which is currently the company’s only profitable business. Rocket Lab aims to build upon Iridium’s network and help deploy its next generation of satellites, which will include direct-to-device services that the space company says “will grow into an important new capability for U.S. national security and emergency response.”