PARIS — Startup satellite broadband operator Avanti Communications on Oct. 10 reported sharply higher revenue, but also a higher operating loss, for the year ending June 30, the first full year of operations of the company’s Hylas 1 Ka-band satellite.

London-based Avanti said the results are in line with what it expected, and that the backlog of orders for Hylas 1 and the just-launched Hylas 2 satellite suggests that both will be filled by 2016.

Shares of Avanti stock, traded on the London Stock Exchange’s AIM market for technology startups, dropped by 13 percent on Oct. 10 following publication of the company’s interim results for the year ending June 30.

Avanti’s Hylas 1 satellite was launched in November 2010 and is in operation at 33.5 degrees west. The Ka-band satellite has won business in northern Europe but has struggled for traction in southern Europe, Avanti Chief Executive David Williams said in a statement accompanying the results.

Hylas 2 was launched in August and was declared ready for service as of Oct. 10. Avanti said in-orbit testing determined that Hylas 2, also a Ka-band satellite, has 11 gigahertz of available capacity, not the 9 gigahertz the company initially expected.

Hylas 2 is stationed at 31 degrees east. Global regulators have tentatively given Avanti rights to this position pending a resolution of a dispute with fleet operator SES of Luxembourg. The government of Luxembourg has asked the International Telecommunications Union (ITU) of Geneva, a United Nations affiliate, to arbitrate the dispute over which of the two companies has superior rights to Ka-band broadcasts from the region around 31 degrees.

The ITU has asked Avanti and SES, and their respective governments, to continue to negotiate a settlement.

Avanti earlier this year raised 75 million British pounds ($120 million) for its Hylas 3 project, a 4-gigahertz Ka-band payload to launch in 2015 on a satellite owned by the 20-nation European Space Agency, which plans a laser data-relay payload as the satellite’s principal mission. The agency is using a yet-undetermined orbital slot provided by Avanti.

In the company’s financial statement issued Oct. 10, Avanti Chairman John Brackenbury said Avanti “continues to evaluate options for additional satellites, but only if they can be prudently debt-financed without recourse to shareholders.”

Brackenbury said Avanti’s backlog of satellite leases continues to grow by around 11 million British pounds per month, but that “the phasing of backlog is more back-ended than expected. Customers have typically committed to five-year contracts with bandwidth usage which sharply escalates during the later part of the contract.”

For the year ending June 30, during which Avanti had full commercial use of Hylas 1, revenue totaled 15 million British pounds — as expected, a sharp increase from the previous year, before the first satellite was operational.

Backlog as of June 30 stood at 268 million British pounds.

Avanti reported an operating loss for the year of 15.7 million pounds. Its EBITDA, or earnings before interest, taxes, depreciation and amortization, was a loss of 5.3 million British pounds, partly as a result of the commencement of depreciation of Hylas 1.

Avanti increased its staff by some 37 percent in the 12 months ending June 30, to 141 full-time employees, as it stepped up marketing and sales in the Middle East and Africa, where it is targeting its future growth.

Williams said the African market, a principal target of Hylas 2, looks just as good now as it did a year ago. Other fleet operators have said pricing in some parts of Africa has weakened with the arrival of new satellites over the continent, and the arrival of fiber-optic cable on the African coast. Speaking about Hylas 1 and Hylas 2, Williams said: “To date we have not seen evidence of any significant price pressure.”

Avanti said its total debt as of June 30 was 175 million British pounds, up 47 percent from a year earlier. The company financed its Hylas 2 project in part with a $328.2 million loan from the U.S. Export-Import bank. The loan is to be repaid within seven years, with a 5.5 percent annual interest. Payments are to start in December.



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Peter B. de Selding was the Paris Bureau Chief for SpaceNews.