Intelsat today
announced an agreement to make a minority investment of approximately
30% in WildBlue Communications, Inc., gaining a strategic position in
the North American retail broadband market.
WildBlue plans to offer affordable, high-speed and high-quality
satellite Internet access service directly to residential and small
business users in predominantly rural areas that are currently
under-served by terrestrial solutions. The service is expected to be
offered to customers in the 48 contiguous States beginning in 2004. In
the role of active minority investor, Intelsat plans to work closely
with WildBlue to support successful deployment of the business.
WildBlue’s proposed satellite broadband service would allow for
Internet connections that are 10 to 40 times faster than dial-up
connections, equivalent to DSL and cable modem service. Customers
would use a 26-inch satellite mini-dish and should expect to pay rates
that are in line with average DSL or cable offerings. The WildBlue
system will also leverage proven terrestrial cable modem technology,
resulting in lower consumer/subscriber equipment and installation
costs, a critical factor for the successful delivery of
satellite-based consumer services.
Representing the next generation in satellite-based Internet
access, WildBlue’s service will be implemented over a multi-beam,
Ka-band satellite that is designed to lower the cost of providing
two-way, high-speed satellite service. User signals will be
transmitted to WildBlue’s satellites and then retransmitted to gateway
earth stations connected to the Internet backbone, resulting in a
highly efficient infrastructure providing nationwide coverage.
“This is a natural step for Intelsat and part of our plan to
establish a foothold in important new markets in a cost-efficient
manner,” said Conny Kullman, CEO of Intelsat, Ltd. “We believe that
retail satellite broadband services in North America will be an
important component of future growth in the fixed satellite services
industry. Millions of rural residents and small offices have no access
to high-quality, affordable broadband service that is comparable to
that available in urban areas. We have confidence in WildBlue’s
strategic plan and believe it represents a key opportunity for
Intelsat to capitalize on this market gap.”
Thomas Moore, CEO of WildBlue, stated, “We are eager to move
forward quickly with our business plan, with Intelsat acting both as
an investor and technology/services partner. Intelsat is an
established leader in the global fixed satellite services industry, as
well as being first in wholesale Internet trunking services via
satellite. We believe Intelsat’s knowledge and expertise will be a
great asset to WildBlue.”
Other companies in this investment round are Liberty Satellite &
Technology, Inc. (a subsidiary of Liberty Media Corp., an existing
investor) and the National Rural Telecommunications Cooperative
(NRTC), whose extensive member network is expected to be used to
distribute WildBlue services to the targeted rural market segment, in
addition to other distribution channels. The NRTC has had much success
in the roll-out of consumer satellite services and is currently the
leading distributor of DTH TV service and hardware to rural America,
serving more than 1.7 million customers. Kleiner Perkins Caufield &
Byers, a leading venture capital partnership and existing WildBlue
investor, is also participating in this investment round, as is David
Drucker, the chairman of WildBlue.
Intelsat decided to invest in WildBlue after an extensive
evaluation of the company’s planned technology, market approach and
subscriber economics. Intelsat’s stake in WildBlue at the end of this
investment round will be approximately 30% on a fully diluted basis
and will be held by a wholly owned subsidiary of Intelsat, Ltd.
The closing of this transaction is subject to the receipt of
regulatory approvals and the satisfaction of other closing conditions.
About Intelsat
Intelsat, Ltd. offers telephony, corporate network, video and
Internet solutions around the globe via capacity on 25 geosynchronous
satellites in prime orbital locations. Customers in approximately 200
countries rely on Intelsat satellites and ground resources for quality
connections, global reach and reliability. For more information, visit
www.intelsat.com.
Some of the statements in this news release constitute
“forward-looking statements” that do not directly or exclusively
relate to historical facts, including statements relating to our
strategic plans and the role that we expect retail satellite broadband
services to play in future growth of the fixed satellite services
sector as a whole. The forward-looking statements in this news release
reflect our intentions, plans, expectations, assumptions and beliefs
about future events and are subject to risks, uncertainties and other
factors, many of which are outside of our control. These factors could
cause our actual results to differ materially from the expectations
expressed or implied in the forward-looking statements and include
known and unknown risks. In connection with the proposed strategic
investment described above, known risks include, but are not limited
to, the failure to complete the planned transaction; the need to
modify aspects of the transaction in order to obtain regulatory
approvals; the risk of delay in implementing WildBlue’s business
strategy; WildBlue’s access to sufficient capital to meet its
operating and financing needs; insufficient market demand for the
retail broadband services to be offered by WildBlue; the quality and
price of broadband services offered by WildBlue’s competitors; and
changes in applicable laws and regulations. Because actual results
could differ materially from our intentions, plans, expectations,
assumptions and beliefs about the future, you are urged to view all
forward-looking statements contained in this news release with
caution. Intelsat does not undertake any obligation to update or
revise any forward-looking statements, whether as a result of new
information, future events or otherwise.
