Viasat’s Dankberg explains medium Earth orbit thinking, global expansion strategy

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WASHINGTON — Viasat is still working on a medium-Earth-orbit satellite constellation idea revealed almost two years ago, but has not finalized what that system would look like, Mark Dankberg, CEO of Viasat, said Aug. 9.

Viasat is “putting a bunch of work” into optimizing a 24-satellite system disclosed in a 2016 application to the U.S. Federal Communications Commission that would provide connectivity using Ka-band and the lesser used V-band spectrum.

The company’s main focus has been spinning up telecommunications services on ViaSat-2, which launched last spring, and building a trio of large geostationary satellites to cover the globe, with each sporting a terabit or more of total capacity. A Viasat medium-Earth-orbit system, being closer to the Earth, would augment services from Viasat’s geostationary fleet.

“There are definitely challenges with non-GEO systems when they are trying to provide 100 percent persistent coverage everywhere in the world,” Dankberg said during an earnings call. “The direction we’ve been looking at is really looking at the non-GEO and the GEO as an integrated system, and that relieves that constraint. We don’t have to use the non-GEO to provide coverage everywhere.”

A hybrid system of GEO and MEO — something SES of Luxembourg is the only operator doing today — would provide “interesting opportunities to reinforce coverage in high-demand places and to get polar service,” Dankberg said.  

“We think it’s probably going to be a little more expensive on a per unit basis than what can be done with really good GEOs, but still could be a worthwhile addition to our fleet, and that’s the direction we are going,” he said.

Dankberg gave no timeline for fielding a MEO system. The FCC has yet to approve Viasat’s application, which would trigger regulatory deadlines to bring at least half the system into service in six years, and the full constellation in nine.

Going global

Viasat is in the midst of an expansion from its core United States market to having a global presence. That expansion started with ViaSat-2, a satellite with coverage over the majority of North America, and through partnerships with other operators of Ka-band satellites such as Telebras in Brazil, NBN in Australia and Eutelsat in France.

Dankberg said Viasat’s increasingly global customer base has helped the company reach agreements with other satellite operators, backing up services, reinforcing coverage in high-demand markets and bringing Viasat into new geographies. While those agreements have created several partnerships, Viasat’s interest in merger and acquisition activity is outside the satellite industry, he said.

“It’s not at all clear that the satellite industry is really the place to look for consolidation,” Dankberg said.

Viasat’s approach to globalization is to “really understand each market and be able to deliver services to end users in those markets, not just sell to intermediaries,” he said. That difference in approach is what caused a rift between Viasat and Eutelsat, culminating in a decision by Eutelsat to ditch an investment in ViaSat-3 and build its own 500 Gbps satellite for Europe with Thales Alenia Space.

Dankberg said Viasat has been trialing Wi-Fi hotspot services in Mexico, setting up satellite terminals that multiple users can tap into for internet access when in range. Nearly half a million people are “within a short walk” of a Viasat hotspot in Mexico, he said, and take rates are “approaching 100,000 unique devices each month.”

Viasat is using the hotspot approach as a strategy for regions where U.S.-style consumer broadband with one satellite dish per house may not be effective, Dankberg told SpaceNews in March, installing dishes at convenience stores, Wi-Fi cafes and other popular locations. The average revenue per user is low, but the aggregate number of customers becomes meaningful over time, he said.

Dankberg said Viasat is more interested in following its own approach to community Wi-Fi than participating in government programs that offer limited amounts of bandwidth. Other countries in the Caribbean and Latin America have interest in seeing Viasat provide similar services within their borders, he said.

Viasat reported $438.9 million in revenue for the months of April, May and June, up 15 percent year over year. The company’s net loss was $25 million, a decrease of $9 million. Shawn Duffy, Viasat’s chief financial officer, said the company’s recent financial performance puts it on a “strong start on our path to profitable growth.”

Dankberg said Viasat has come to grips with an antenna malfunction that cost ViaSat-2 about 15 percent of its projected maximum capacity, and redefined the satellite’s coverage area in high-demand markets “to a size that’s much closer to that originally intended.”

Dankberg said the insurance claim Viasat filed is “converging,” but remains too early to predict when it will complete. In the meantime, the company is seeing traction in the U.S. with higher speed 50 to 100 Mbps broadband subscription plans, he said.