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 better job managing our supply chain. While we believe that last quarter's Iridium recall was an isolated incident, we've intensified our focus in this area. We've diversified the manufacturing line for M2M device production, scrutinized supplier relationships and examined internal processes to improve efficiency. We're making some key improvements in this area because although our equipment revenue in the first half of 2012 was on track, we could have done even better in meeting what were seen as growing commercial demand.
Now if I step back and really take a complete top-down view of the business, we're in pretty good shape, especially on the commercial side but really, on the government side as well. It starts, of course, with a differentiated and very capable network. Our network is our greatest asset. Everything else we do comes from this sustainable competitive advantage. It impacts which markets we're successful in today, which markets we can enter tomorrow and ultimately, the quality of our revenue profile.
When you compare Iridium to the rest of the mobile satellite services space, no one else serves the breadth of business areas and vertical markets that we do, and no one else offers the same robust suite of products. So we're always focused on building upon the power of our most important asset, our unique satellite network. Thanks to its resilience and flexibility, that network continues to perform very well.Read the rest of this transcript for free on seekingalpha.com
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