Good day, ladies and gentlemen, and welcome to the Iridium Second Quarter 2012 Earnings Conference Call. [Operator Instructions] As a reminder, today's conference is being recorded. I would now like to introduce your host for today's conference call, Mr. Steve Kunszabo, Head of Investor Relations. You may begin, sir.

Good morning, and thanks for joining us. I'd like to welcome you to our second quarter 2012 earnings call. Joining me on the call this morning our CEO, Matt Desch; and our CFO, Tom Fitzpatrick. Today's call will begin with a discussion of our 2012 second quarter results followed by Q&A. I trust you've had an opportunity to review this morning's earnings release, which is available on the Investor Relations section of Iridium's website. Before I turn things over to Matt, I'd like to caution all participants that our call this morning may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are statements that are not historical fact and include statements about our future expectations, plans and prospects. Such forward-looking statements are based upon our current beliefs and expectations and are subject to risks, which could cause actual results to differ from the forward-looking statements. Such risks are more fully discussed in our filings with the Securities and Exchange Commission. Our remarks today should be considered in light of such risks. Any forward-looking statements represent our views only as of today, and while we may elect to update forward-looking statements at some point in the future, we specifically disclaim any obligation to do so even if our expectations or views change. During the call, we'll also be referring to certain non-GAAP financial measures. These non-GAAP financial measures are not prepared in accordance with Generally Accepted Accounting Principles. Please refer to today's earnings release and the Investor Relations section of our website for a reconciliation of these non-GAAP financial measures to the most directly comparable GAAP measures. With that, let me turn things over to Matt.

Thanks, Steve, and good morning, everyone. Thanks for joining us. This morning, we announced second quarter numbers, which is our 10th earnings report since going public in late 2009, and it's probably the first time we haven't lived up to or exceeded expectations as we lowered our service revenue and operational EBITDA outlook for 2012, and I'm obviously disappointed about that. However, I don't think you'll find this to be a trend. We remain very positive about our overall competitive position with the help of our current network and the progress we're making in replacing that with Iridium NEXT and our new hosted payload business and many other factors that give us confidence in our long-term growth path. I'll first address why we fell short this quarter, which was primarily due to further weakness in our legacy government handset business before taking you through the strategic elements that will underscore our growth in 2013 and beyond. Let me be clear here. While we may have lowered our short-term expectations, I really like our long-term prospects. Tom will then run through the results in our revised financial guidance. So to the government business. We've seen a higher number of deactivations by our traditional government handset customers largely due to reduced troop levels in the conflict areas. While we can't directly address its impact until we renew our long-term contract with the Department of Defense next year, we're confident that the strategic nature of our relationship with this anchored customer hasn't changed. They continue to spend with us on new product developments in a multiyear modernization plan for their dedicated gateway. And the feedback from senior, civilian and military leadership continues to be constructive about our long-term partnership. On another issue, I think we found we can do a better job managing…

Thanks, Matt, and good morning, everyone. We've reported second quarter 2012 results that showed ongoing expansion in our commercial franchise while also highlighting greater-than-expected weakness in the government voice business. Consequently, we reduced our service revenue growth rate for 2012 to approximately 6% and now forecast that our operational EBITDA will be between $205 million and $210 million. I'll first focus on our results, and then take you to a more detailed view of our updated 2012 and long-range outlook. Iridium recorded second quarter total revenue of $97.3 million and operational EBITDA of $52 million, yielding growth of 1% and 7% respectively from last year's comparable period. Our operational EBITDA margin was 53% for the second quarter, which was an expansion from 51% in the year ago period. It's worth noting that we're nearing striking distance of the approximately 60% operational EBITDA margin we anticipate reaching by 2015. This not only speaks to the operating leverage of our business but to the room we have for margin expansion when you consider that our more mature satellite peers have EBITDA margins in the high 70% range. There's no structural or competitive reason we won't achieve similar margins over the long term. Second quarter net income was $17.7 million. This represents 51% growth over the $11.7 million we posted for the year ago quarter. Second quarter net income benefited from a $6.6 million reduction in depreciation expense due to an extension in the estimated useful life of our current satellite constellation. We consider many factors under Generally Accepted Accounting Principles when evaluating the appropriate depreciable life of our network and place considerable emphasis on the periodic assessment provided to our Coface lenders by their aerospace consultant. During the second quarter, this consultant materially increased their estimate of the remaining useful life of…

[Operator Instructions] Our first question comes from James Breen with William Blair. James D. Breen - William Blair & Company L.L.C., Research Division: Just a couple questions. One, you obviously highlighted the strength you had in the commercial business and a little bit of a step-down in the government side. Can we talk about -- do you expect government to remain at the current level going forward? And then as a part of that, engineering and support services have been coming down over the last couple of quarters. Is that basically tied into and should move in step with the government revenue? And then secondly just, Tom, if you just go through what you just talked about in terms of some of the changes you made to the credit agreement in terms of potentially issuing some convert or preferred stock in the beginning next year, just can you outline for us what the potential dilution would be, or maybe the total number of debt that we have to be issued?

Okay. Do you want to take the...

Well I mean, I can speak to it. We've put the government services in -- it's sort of baked in that, in the new guidance that we've put into. As we said we sort of still see -- we now think we understand more the effect that the downturn in Afghanistan and Iraq and everything are causing in terms of the squeeze on a certain part of the business, but we still see a diversification of business into M2M and Netted and other things here. So overall, it's going to be on this path here for another little while, and that's why we baked that into our projections. But I think we can kind of get that back starting particularly later next year and into 2014, '15 to a more stable course.

Jim, on the engineering and support, no, that is not going to move. And let's just break government apart. The problem is with our legacy voice handset within the government. Our Netted business is growing. Our SBD business is growing as this larger piece of our business with them did decline on the back of handset deactivations. The government continues to spend with us on improvements to their...

The gateway...

To their gateway in Hawaii and we see -- would see increases in that. It's kind of episodic. They pay us for a certain functionality to deliver it, and so we're not calling that engineering support that happens to be down this quarter, but that's because they completed a project, and there's other projects in the queue that will represent additional investment there. So you can't think about government as just down. There's an element of it that is down, and that's our problem this year, but there are other elements of it that continue to grow.

And in fact, there's a considerable investment that has been planned and approved to upgrade that gateway, the NEXT capability. And it really just depends on what we're installing and doing in any -- in a specific quarter that relates to that, as well as some of the R&D that's being spent on some future projects and products that they want to have. Some of those gets slowed down a little bit. And I think they're a little slower than they might have otherwise been, but they're continuing to flow just at a slightly slower rate.

And then so the second question, Jim, about the issuance of capital. So as you know, in our prior filings, we've indicated that the proceeds from the $7 warrants were part of our -- how we thought about our funding plan for NEXT. And so the lenders thought of it the same way, and all this commitment essentially does was make sure that the capital from those warrants will come into the company. If those warrants are not exercised, we essentially have a May call to extend the warrants that will come in. So if it's less than $100 million, we'll have to issue the difference between what does come in, in a $100 million. James D. Breen - William Blair & Company L.L.C., Research Division: Okay. And it's your choice whether it's a convert or preferred stock or straight debt, or is there a certain...

It's the choices between a convert and equity. James D. Breen - William Blair & Company L.L.C., Research Division: Okay. And then just lastly on the revenue trends, it seem like last year, in 2011, a little bit of a slowdown in the second quarter in the commercial business. Is there any seasonality around the commercial business in the second quarter that you generally see?

No, actually, second and third quarter typically are our biggest quarters. Fourth quarter and first quarter are a little slower because of, what we call it, the northern hemisphere effect where a slight bit more of our traffic is in the northern than in the southern hemisphere and it's warmer, and fishing vessels are out in the summer more and people are outside more, et cetera. So there's -- this actually is usually part of our bigger quarters. And I think you'll see, if you go back over several years, including this year, the summer is -- or the summer and fall, if you will, are bigger quarters than the winter.

Our next question comes from Jim McIlree with Dominic and Dominic.

It's Jim McIlree. I'm not sure what name he said. Just wanted to make sure I understand the reduction in the guidance. You're saying it's mostly from government or all from government services?

Substantially all from government. We see our commercial business kind of on track with our historical growth rates.

Okay. And it seems like -- just backing into it, Matt, that you were saying that the government services is going to be, I forget the language you used, kind of like this for the next few quarters. And kind of like this in mind means that this $15 million, $16-ish million revenues for the next few quarters, is that a fair assumption?

Yes, I mean, the way we look at it really is, of course, since we really get paid by the subscriber, and as Tom said, and specifically that one part of the business, the core voice point-to-point handsets, there's going to potentially be a continued leakage I think over the coming quarters in terms of the absolute numbers of those. They're not that big in numbers and are still a substantial business there as we go along. But I think there will just continue to be some pressure over the next year on those numbers as we go forward, which puts pressure on the fact that the other growth areas really aren't quite making up for that yet. They will over time, but they aren't quite yet. So it's pushed our government business down a little bit because as I said, I think that's more of a short-term trend than a long-term trend. We really do see really based on all the activities many of which Tom and I talked about that are going forward as being positive long-term.

Okay. And given the changes that have taken place over the past few months with the hosted announcement to now, and now the government pushout and the change in the launches, et cetera, can you just summarize again that path you have to finance the NEXT constellation?

I'll let Tom reiterate that. I don't know what you meant by pushout in the launches. That's not -- there was no pushout in the launch actually.

Well, excuse me, the changes in the launches.

It's a different strategy that, as I said, just is actually smarter and a little less expensive, frankly, and still delivers 72 satellites over the same time but with less risk. So that really is just sort of a slightly reshuffling. You might say that there might have been a couple of months slip on the first Falcon 9 launch, but that's probably just a -- that's probably a benefit too in some ways, if anything. So we'll still get our first satellites up when we thought we would be, test them out thoroughly, and then still on beyond track to get all the satellites over the 2-year launch window. So -- but in terms of the total profile, it hasn't really changed.

Right. Yes, I mean, as Matt said, I mean, the changes to the SpaceX agreement are nothing but goodness to our -- to how we think about our plan for Iridium NEXT. It derisks our launch strategy. It was a savings, it's a savings to our approximate $3 billion plan. So there's nothing but goodness there. And so, as we said many times, our plan for the funding of NEXT, which is approximately $3 billion, has 3 elements to it. The first element is our $1.8 billion Coface facility. The second element is approximately $200 million to $300 million in hosted payload fees, and which Aireon is $200 million, and others that we're working kind of make up the balance. And finally our operational EBITDA, which on our current guidance is north of $200 million run rate and include that over 8 years of the construction of NEXT, that's what aggregates to our plan.

Our next question comes from Chris Quilty with Raymond James. Chris Quilty - Raymond James & Associates, Inc., Research Division: I wanted to address some of the commercial voice ARPU issues. I think that was probably one of the bigger year-over-year declines you've seen in the voice ARPU in a while. I wanted to get a sense of what you think is driving that. Are there competitive issues with some maritime customers moving to VSAT solutions? Is it your much heralded Inmarsat competitor taking business with the Isatphone, or is it just a change in customer usage patterns moving from postpaid to prepaid that's impacting the near term?

Yes, Chris, it is not price of usage, and it's usage most acutely in our very high users of LBTs for circuit switch data, and they're moving to either OpenPort or to other solutions just because the price for many it is cheaper. And so that's where we see it. That's where it's most acute but just I would say generally a decrease in usage across the board is what the driver is there.

Yes, I agree with Tom. It's more -- these -- we have a number of very high users that were using the LBT in a maritime and aviation perspective that some of those are now moving to OpenPort but at a lower cost per bit, and that's part of the impact, or it's a good size of the impact. I don't think we see it really that much in the handset side of the business. Those sort of stayed pretty stable and really still don't see a lot of impact from any kind of competitive dynamic from anyone really in that case. If anything, we feel like we've strengthened a bit with the broadening portfolio that we have and additional solutions like access points and other things, which will help from that perspective, though our very early days really aren't contributing materially to the ARPU. But down the road, I think it would be helpful. So I really think it's about that really dynamic and primarily, I would say in more like the maritime market or specific applications of an LBT for some high users that are moving to other technologies. And I think those will get recovered over time. Chris Quilty - Raymond James & Associates, Inc., Research Division: M2M, I think you're still aiming to launch the new 9603 sometime in the near term and that launch doesn't seem to have slowed the growth rate in the near term. What are your -- what's your outlook on a go-forward basis for the impact of that product, either with an absolute growth rate or if you can discuss trend lines with new OEM customers?

The device side of the equation, the M2M is a very important piece of it. And so the fact is we're really diversifying our portfolio with the 9603. We're not -- it doesn't replace the 9602 like the 9602 replaced the 9601. It's 70% smaller and -- but it's about the same price. So more than anything else, the 9603 enables some new applications that probably wouldn't possibly have even gone to a satellite M2M solution because the tax on putting a satellite in a solution really is even less with a 9603 than a 9602. So we have both government and commercial customers. Specifically, consumer devices really are excited about the 9603, and while we did launch that in the spring, it's actually only starting to ship now to our initial customers and probably won't get into a lot of products until later this year and on into 2013 but it more broadens the range of applications that we can address as opposed to sort of changing any kind of dynamics. But overall, I mean as you can see our M2M business remains very healthy. We -- I think that there's been some good moves from some traditional players towards us because of the broadening portfolio but also just because of the -- they realized our network advantages and other advantages and I -- we got a lot of plans still in terms of continued development and things that we think will even give us more advantages going forward. Chris Quilty - Raymond James & Associates, Inc., Research Division: Okay. Switching to the government side. Can you give us a sense of where you think the Netted Iridium Phase III progress is, when you'll complete that development process, when you might see new orders for devices? And then more specifically, what you think the structure of the new 5-year contract will look like. Will it be very similar, just different pricing terms, or will this be a radically restructured contract from what you've seen in the past 2 cycles?

Yes to the first part, the Netted, what we call distributed tactical communication system, as the government calls it, you're right. As we've talked about before, we're in sort of a development cycle right now where they're not deploying as many Phase II radios because they're really waiting for the Phase III product to be available. And there is a development process right now. It's a little slower than we like because it's just sort of the R&D continues to flow but not quite at the rates that if we would, it would go faster. So we're sort of feeling that, that's not going to make as much of an impact until later next year. Or certainly 2014 is really when I think you'd see the impact of that. Simultaneously, that development also enables us to put Iridium into other existing tactical radios, either as an add-on or as a way form into those radios. And a lot of those discussions continue to progress and will be -- I think we'll see from parallel activities. So it won't just be our devices going out there. It would be existing devices that might otherwise have another technology and unloading Iridium into their library of technologies. So that's, that. And I think that will play itself out over the next year, 1.5 years. On the contract, I mean, I don't think we want to negotiate in public right now in terms of describing our contract process. So I'd rather not going into detail. Just the details of that, there is -- the current contract is up and so it has to be completed really into the first quarter or so of next year. I think it's in May, I think it is or is it...

March.

It's March. So March. Obviously we'll be talking with them throughout the rest of this year and early into next year. They can extend that 6 months if they want to, though, we've been already working around and actually working with them on what that new contract might look like. And -- but there's still work to be done, and I won't go in details other than we feel very positive about the potential there of what we can do in terms of, as Tom said, bringing more value and really shoring up our growth rate going forward here as we look at that. Chris Quilty - Raymond James & Associates, Inc., Research Division: Well, maybe just a clarification. I think Inmarsat's contract got folded into Fixa [ph]. And is it your understanding that the Iridium contract will still remain at some vehicle?

That's our strategy, yes. I mean that is our expectation.

Our next question comes from Glenn Tongue with T2.

A lot of good news embedded in this. I wanted to touch on the change in the depreciation schedule on the existing constellation, which I guess implies that it's going to be more longer-life than you expected. Is there any way to take advantage of the greater use for life?

If you mean in terms of stretching out the capital program, probably not nor would we want to. I mean, we're really pleased that our constellation is going to be healthy well into NEXT now, and that's been proven. We've always thought that but, frankly, now even external consultants that are independent and paid for by the banks view that in the same way. But the problem is you push out or you delay a big capital program in my experience from having done this a lot, it ends up costing more and has unintended consequences. So you drive and get it done, and the other reason for not doing it would be, we have some exciting new hosted payload businesses we'd like to start generating data service revenues from that would far outweigh any kind of benefit we'd get from it. So I think it's more flexibility, and it's great to have, but it's not something you really kind of take advantage of other than, I would say, depreciation schedules improve.

Well and I guess I'd say what are the risks of the table in terms of the gap between existing constellation and NEXT. In terms of the Aireon business, is there any more color on that you can add as far as what's going on there? Any thoughts of capitalizing that business independently in the relatively near future.

Well there's a number of kind of milestones that we are set to do through this year with our partners. We've got to finalize some of the initial contracts that we have with that, which includes with our first customer for that service, which should be Nav Canada, but a lot of work we're doing right now with the FA and continuing to sort of support the sort of analysis and effort that are going on with them. Fairly, we want to get a little bit further down the road on the technology. And as I said, we're feeling very good about sort of the launch of that and what that platform will be able to do for us. So I don't see anything, what I would call, near term from that perspective, but we're quite bullish about the potential for that business obviously. And as I said, it's only generating even more enthusiasm as now what had been obviously a rumor and discussed it now a lot more clearer as to how we are doing it, who we're doing it with, when it's going to do, what it's going to do. And I hope to be more fulsome in terms of our describing that business in the future as we clear a few of those milestones we want to have.

Our next question comes from Chris King with Stifel, Nicolaus. Christopher C. King - Stifel, Nicolaus & Co., Inc., Research Division: I just had one I guess kind of a follow-up to Chris's questions specifically on the voice side of things. It looks like in terms of the guidance that you're laying out that you do expect are going to be a re-acceleration or an acceleration, I guess, of specifically commercial services revenue growth to kind of get to your guidance in the 2013 to 2015 range versus what it is this year. Just was wondering how we should kind of look at that with respect to the voice versus the M2M split. Is that acceleration going to be almost entirely from an M2M standpoint, or do you expect the trends that we saw in the most recent quarter here on the voice side? Do you expect those to materially accelerate as well as you get more kind of OpenPort subscribers into the base and that type of thing?

Right. Chris, so we said that we expect a higher growth rate in our service revenues in 2013 than in 2012. And there are a number of reasons for that expectation. We expect accelerated growth in Netted Iridium within the government sector, given the rollout of our Phase III offering. We expect accelerated growth in SBD within the government sector. In our commercial business, we expect firming ARPU. In 2012, we've been experiencing about $3 year-over-year reduction in ARPU. We don't expect that to continue in 2013 for a number of reasons. We expect accelerated growth in OpenPort in 2013 based on growth we're already seeing in 2012 that will be accretive to ARPU. Similarly, our 2012 introduction of bands of Iridium will yield increased growth in the aviation sector in 2013. ARPUs in this product are approximately $250 and will be accretive to overall commercial voice ARPU. We expect that our prepaid revenue will increase. It will experience increase growth in 2013 and similarly, be accretive to commercial voice ARPU. We expect that more revenues will be recognized in 2013 than in 2012 due in part to a higher number of expiring minutes on prepaid plans in 2013 than in '12, which will trigger for revenue recognition. We also expect that our new product offerings in commercial push-to-talk, global data broadcast and Boeing location services or BTL will contribute modestly to 2013 and materially to 2014 and beyond. Christopher C. King - Stifel, Nicolaus & Co., Inc., Research Division: I guess just a quick follow-up then, in terms of the lower postpaid customer usage that you talked about in the press release, do you expect a material change there going forward in terms of the usage patterns for voice?

No, we do not but the changes that I discussed that are accretive to ARPU will dominate that.

[Operator Instructions] Our next question comes from Brian Ruttenbur with CRT Capital.

The main question I have is a question of why or what has driven the credit agreement change? Is that because of the change in the launch strategy? Is that the change in your guidance? What has -- and maybe just explain that a little bit better that triggered the change in the credit agreement.

It wasn't the change in the guidance. The ability to invest money in Aireon was basically the triggering event, and it happened at the same time as the renegotiation of the SpaceX agreement. So those were the 2 drivers.

And by the way, the announcement last night just happened because it was completed yesterday. And it happened to work out that it was the day before our earnings announcement. The 2 aren't really tied together in any way. We've been working on knowing we had to do the credit facility changed because of SpaceX, because of Aireon, frankly, for 6, 9 months anyway. And we've been working with the banks on that change that was always in the plan and had to happen underway for quite a while.

Yes, and the 8-K, we put that out last night just to give investors time to absorb it and be prepared for questions this morning. So it was really just kind of in your interest that we put it out that way.

Okay. The other thing is the change in launch strategy. How much are you going to save? I've heard some -- I haven't heard definitive numbers. Do you have a specific -- we're going to save $50 million or we're going to save x idea on hard numbers?

Yes, it's in the area of $15 million when you consider the reduction in SpaceX and the kind of what we'll pay to Kosmotras for the first 2.

Okay. So with that savings, the way it's going to work is the first launch will be early 2015, and then SpaceX will launch another group of satellites in '15, or is it going to be '16? When will the...

It would be mid-15. So the expectation before was that SpaceX would be our first launch of 9 satellites in, say, the first quarter. Now we're going to launch 2 satellites in that first quarter, test them out a bit more thoroughly and then in summer of 2015, we'll start our launch campaign on the Falcon 9 rocket, launching 10 at a time and literally, that launch campaign we have lunch slots confirmed and really, every quarter or so, quarter or 2, we launched 10 more satellites until it's complete about mid-2015. So it's a 2-year launch campaign of 7 launches over a 2-year spread somewhat evenly over that time. I just want to reiterate. I mean, the $15 million we talked about, this is already probably the most cost-effective launch campaign maybe in history when you think about the per kilogram to lower orbit. The deal we got was an excellent one to begin with. And obviously, we got that because we started very early with SpaceX before they were quite as popular and as cool as they are to everybody today. We knew them when they weren't quite as cool, and we worked with them very closely. And it's a very important campaign that I think we both wanted to be part of, so it was already a great deal. And I think this is just even better and reiterating even more how a great of a program this is going to be.

Our next question comes from Chris Quilty with Raymond James. Chris Quilty - Raymond James & Associates, Inc., Research Division: I just want to circle back on a point that you made earlier on the Boeing launch services. I think this is the first time I've heard you talk -- or not launch, location services. But you haven't talked about that previously in terms of actually having a revenue contribution. Can you just quantify for us, is that the commercial or the government aspect of that GPS enhancement service that they're looking at?

Well specifically since it's probably not many people have been following this, there's 2 different capabilities. And they're not really -- they're not the same in any way. They're actually 2 different technologies, both though are developed in conjunction with Boeing, who really developed the invention, if you will, on both sides. But one is with the government, and it's called iGPS. It's really an anti-jam capability. And there's s a lot of activity continuing to underway it in terms of potential demo this year. And we really do see a value to that, but that still has its own sort of profile. And then the commercial capability, which Boeing created, and I'd say they're loosely related but it's been termed Boeing time and location or BTL. And it's a technology that can go in to commercial devices, that could go into smartphones, go into [indiscernible], we go in to all kinds of interesting things that would enable in-building coverage of in-building sort of navigation or location services in a superior way, and we support both of them. Boeing is really the lead on both of them in terms of sort of the technology. We get air times. There's a lot of other benefit that come out of this and really, I think Tom was sort of mentioning it not because there is a specific revenue stream, but we do see it and there's enough activity on that over the next couple of years that we'll see -- it will start contributing over the next couple of years here. I don't think it's going to be a big adder next year but 2014, 2015, those could add service revenues as we turn on those capabilities in our network over either continents or the whole world. Chris Quilty - Raymond James & Associates, Inc., Research Division: Okay. And a follow-up on the maritime business, which you seem pretty positive on. Can you talk about number of units installed, what you're seeing in ARPU trends and any impact you've seen from Inmarsat's change in pricing strategy.

We didn't call out numbers yet still, but we'll consider doing that here soon again. I'd say this has been a better year than last year, frankly, substantially better, which I think is due to a number of reasons. I mean, one, our Iridium Pilot has been really well received. It's even more capable and bulletproof, if you will, from a perspective than previous model. And I think our service providers really like it a lot. It's been out there only about 6 months or so, but it's really been well received. Inmarsat's helping a lot. There are price changes. They're competing with their customers. They're -- it's been a little confusing obviously what their strategy is, but I think it's confused the market quite a bit. I think they've clearly told the FFS market that they want to compete with them. I say FSS broadly, the VSAT market that has created some relationships and partnerships that we have because we think that's actually the best-in-class relationship between our completely global, low-latency L-Band solution, coupled together with Ku -- our Ka-band kind of technology with the best cost per -- throughput cost per bit. And you're seeing that right now, and we're starting to get into KVH. And a number of other different VSAT players are starting to deploy us along side almost other VSAT. And I think that's going to -- Inmarsat used to be used for that. We're going to be used for that probably more going forward. So the dynamics are good there. ARPUs are -- ARPUs I think they're all over -- coming down slightly there a little bit, but I think that's -- it's more of a mix issue. I mean, we still have very high ARPU users and fishing and some other vessels that are smaller. We have lower ARPU units that are more back up and component. So I think that's going to be -- that's going to move around but overall, the net effect of OpenPort is adding more and more every year to our bottom line. As we said, it's up to 10% now of our service revenues. I think that will continue to expand, but I think it's a really important leg. I know we focus on M2M, but I think Pilot OpenPort is going to be another really important leg as people see. And by the way both in the maritime and in the aviation business as well as we're starting to see it get on to aviation.

I'm not showing any further questions at this time. I'd like to turn the conference back to our host for closing comments.

Well, I appreciate everybody for joining us. We'll see you again next quarter. I think obviously we're glad to take any questions and support after this as usual. But thanks again for joining us.

Ladies and gentlemen, that concludes today's presentation. You may now disconnect, and have a wonderful day.