ViaSat Building Speedier Broadband Bird

ViaSat has tapped Boeing to build ViaSat-2, a next-gen, Ka-band satellite that will “double the bandwidth economics” of its current broadband satellite while also increasing its coverage footprint by seven-fold as it targets a spate of markets, including residential and government services and in-flight connectivity.

Set for launch in mid-2016, the new bird will provide coverage in North America, Central America, the Caribbean, a “small portion” of northern South America, and primary aeronautical and maritime routes across the Atlantic Ocean between North America and Europe.  

“ViaSat-2 represent a significant breakthrough in broadband satellite technology – for the first time combining extremely high bandwidth capacity with very large coverage areas,” ViaSat CEO and chairman Mark Dankberg said, in a statement. “ViaSat-2 will make it possible to offer superior in-flight connectivity on applications ranging from JetBlue leisure flights to the Caribbean to U.S. government aircraft traveling to Europe or Latin America, to critical national and Homeland Security missions.”

ViaSat, which counts DirecTV and Dish Network as partners, said it will use enhanced networking technology called SurfBeam that’s designed “to multiply the speeds offered to a level commensurate with high-speed fiber-to-the-node networks.”

On Thursday’s earnings call, Dankberg declined to discuss the new SurfBeam architecture in detail, but noted that it’s not a steerable antenna spot beam that can only illuminate a relatively small portion of the footprint at any given point in time. "We would describe our capability as an everywhere offering," he said.

ViaSat has also not disclosed what specific speed tiers it will offer when the new satellite comes online, but ViaSat-2 will “improve our offered speeds by multiples of the current Exede 12 service,” which supports downstream speeds of 12 Mbps, Dankberg said.  

ViaSat-1 is designed to support about 1 million subs with the 12-Meg Exede tier. “So…if the satellite costs were the same, we ought to be able to do 2 million at exactly the same level,” Dankberg said. Looked at another way, he added, ViaSat-2 will support 1 million subs at 2.5 times the bandwidth. If that’s the case, the new architecture would seemingly target downstream speeds up to 30 Mbps.

A ViaSat spokesman offered more clarity on the potential speed targets on Friday, noting that capacities for ViaSat-2 will support 2 million subs at 12 Mbps or 1 million subs at 24 Mbps.

“It can be higher speed, it could be more usage, [there are] a lot of ways we can implement that,” Dankberg said Thursday, adding that the new architecture will be “dynamically configurable across geographies.”

ViaSat’s total costs for the new satellite could reach about $750 million. Dankberg said the original projected budget for the total system cost of ViaSat-1 was about $500 million, while the budget for the ViaSat-2 “is about 25% higher,” Dankberg said.

ViaSat’s 12 Mbps downstream by 3 Mbps upstream Exede 12 service is subject to metered usage from 5 a.m. to midnight and monthly broadband caps. Among the current service packages, the top Exede 12 tier costs $129.99 per month with a monthly 25 Gigabyte cap; the middle tier sells for $79.99 with a 15 GB cap; and the low-end offer is $49.99 with a 10 GB cap. Customers can purchase more capacity in 1 GB increments. 

ViaSat on Thursday said it installed nearly 100,000 customers in the fiscal fourth quarter, with more than 90% on the new Exede platform as it continues to shift its focus away from the older (and slower) WildBlue platform.  ViaSat added 46,000 net new customers, giving it a total of 512,000 subs, up 33% from the year-ago period. About 295,000 customers are on the ViaSat-1 satellite.

ViaSat posted a net income of $1.9 million on revenues of $308.7 million.