Rocket Lab is buying the Iridium satellite network for $8 billion to take over SpaceX

Rocket Lab, the space company best known for its small satellite launcher Electrons, they are announced purchase intentions Iridium Communications for $8 billion. The deal will combine Rocket Lab’s launch and spaceflight operations with Iridium’s satellite communications network, putting it in a better position to challenge SpaceX.

Iridium provides communications to more than 2.5 million subscribers worldwide. Users tap into Iridium’s constellation of 66 low-Earth orbit satellites and L-band spectrum to communicate with people on ships, planes, and other remote locations. Iridium has partnered with SpaceX to to launch its own constellation of NEXT satellites in 2019.

In video about shoppingRocket Lab CEO Sir Peter Beck says the deal will provide a “shortcut” for the company to build satellites. “They have a very important quality, which is hard to find,” says Beck. “They have millions of customers, and, of course, they are trusted government agencies.” Beck adds that it’s a “very profitable business” and that the company “doesn’t invest in hopes and dreams.” To move SpaceX’s Starlink propulsion systemwhich is currently the company’s only profitable business.

Rocket Lab wants to build on the Iridium network and help deploy its own satellites, which will combine direct missions with equipment that the space company says will “grow into a new capability for US national security and emergency response.”