Rocket Lab (RKLB), a challenger to SpaceX (SPCX) in the rocket launch business, is now going after SpaceX in a different way: satellite connectivity services.
Rocket Lab said it had agreed to acquire Iridium Communications (IRDM), a pioneer in satellite voice and connectivity, for around $8 billion in a cash and stock deal. The move gives Rocket Lab an operational satellite network and a paying customer base overnight and sets up an eventual bid to compete with SpaceX’s Starlink, the dominant force in satellite broadband.
Under the agreement, Iridium stockholders will receive $54 per share, consisting of $27 in cash and the rest in Rocket Lab common stock. The price is about a 24% premium to where Iridium had been trading.
Iridium stock jumped 20% in early trade following the news, and Rocket Lab stock climbed 9%. The companies expect to close in mid-2027, subject to shareholder and regulatory approval
For Rocket Lab, led by founder and chief executive Sir Peter Beck, the logic is vertical integration. The company built its name on the Electron small rocket and a spacecraft manufacturing arm, but it can now move into operating its own satellite constellations and selling services.
Iridium delivers that connectivity with its low-earth-orbit network of 66 satellites, globally coordinated L-band spectrum, and more than 2.55 million subscribers across maritime, aviation, government, and defense markets.
“This is a defining moment for the space industry,” Beck said, framing the deal as a way to “go far beyond maintaining a legacy” by using Rocket Lab’s launch and manufacturing capabilities to build Iridium’s next-gen constellation and push into satellite internet of things, direct-to-device connectivity, and positioning, navigation, and timing services.
While Iridium’s L-band spectrum is critical as a scarce resource that analysts have flagged as the central bottleneck in building new space-based services, the company also has more to offer.
“While spectrum is the central asset, Iridium brings much more to the table for Rocket Lab than just spectrum,” William Blair analyst Louie DiPalma wrote in a note Monday morning, noting Iridium’s alternative position, navigation and timing chip, narrowband non-terrestrial networking, flight tracking service through Aireon, satellite voice, and several major Department of Defense contracts.
Whether Rocket Lab can compete with Starlink at scale is another matter. Iridium generated $871.7 million in revenue in 2025 from its 2.55 million subscribers. Starlink, according to SpaceX’s IPO prospectus filed last month, ended the first quarter of 2026 with roughly 10.3 million subscribers, up from 2.3 million at the end of 2023. Its connectivity segment booked $11.4 billion in revenue in 2025, about 61% of SpaceX’s total, and generated an estimated $7 billion in segment EBITDA at a 63% margin. While Iridium is a stable, revenue-generating business, Starlink is an order of magnitude larger and still growing fast.
