ViaSat’s Dankberg Unfazed by Mega-Constellation Hoopla

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TURIN, Italy — Satellite broadband provider ViaSat Inc. on Feb. 10 said it sees no reason to question its strategy of putting a handful of half-billion-dollar Ka-band satellites in geostationary orbit for Internet delivery despite the hoopla surrounding Google, SpaceX, OneWeb and other big names investing in low-orbiting satellite mega-constellations.

“We’re still trying to figure out why a LEO [low Earth orbit] network would be better than what we’re doing now,” ViaSat Chief Executive Mark D. Dankberg said in a conference call with investors. “There’s a question of whether making hundreds or thousands of satellites is a feature or a bug.”

Carlsbad, California-based ViaSat provides broadband Internet service to consumers, small businesses and airlines through its own satellites in geostationary orbit. The company’s focus has been simple: Provide more bandwidth, as efficiently as possible.

“There’s a question of whether making hundreds or thousands of satellites is a feature or a bug.”

ViaSat’s North American service, called Exede, increased its subscriber count by 2.7 percent, to 675,000 in the three months ending Jan. 2. Some beams are filling up, meaning ViaSat is approaching a period where it will be unable to meet demand in some of its highest-growth regions.

ViaSat CEO Mark Dankberg. Credit: ViaSat
ViaSat CEO Mark Dankberg. Credit: ViaSat

The 6,750-kilogram ViaSat-2 satellite, under construction by Boeing Space and Intelligence Systems of El Segundo, California, is scheduled for launch on a SpaceX Falcon Heavy rocket in mid-2016 and will be able to service twice as many customers as the current ViaSat 1 or the same number at twice the bandwidth.

Backers of low-orbiting constellations say low latency is a key discriminator for their systems. The round trip between the satellite at 1,200 kilometers in altitude and the user terminal being faster than with a satellite in geostationary orbit at 36,000 kilometers in altitude, the user experience will be superior, they say.

Dankberg and ViaSat disagree and point to Exede in the Air, the company’s broadband service for commercial airlines, as an example of a geostationary satellite system being given higher marks by consumers than systems using air-to-ground terrestrial technologies, which offer reduced latency.

“There is a common misperception that latency is a dominant technical measure of performance for broadband,” Dankberg said. “Yes, latency is important, but for the vast majority of Internet traffic, speed and bandwidth are what’s decisive. This captures our technology strategy in a nutshell.”

“Yes, latency is important, but for the vast majority of Internet traffic, speed and bandwidth are what’s decisive.”

ViaSat-2 will extend the company’s coverage to around 40 nations in the Americas. ViaSat and Paris-based Eutelsat have agreed to a roaming agreement to offer unbroken coverage between North America, Europe and the Middle East, which are covered by Eutelsat’s Ka-Sat, also in geostationary orbit.

ViaSat is targeting the U.S. government as a major future customer that will take advantage of the unbroken coverage across the Atlantic. Dankberg said 85 percent of all government use of commercial satellite bandwidth is over North America, Europe and the Middle East.

ViaSat and Boeing have been trying to sell a ViaSat-2-type system in other regions of the world, so far without success. In the conference call, Dankberg again held out the hope of a major transaction, saying that 2015 should be a decisive year.

In addition to operating its own satellites, which use ViaSat-built ground  hardware, ViaSat provides satellite components that are embedded in several existing and future low-orbiting constellations.

Dankberg said it is likely ViaSat will find a similar subcontractor’s role if any of the recently announced constellations promising global Internet access are actually built. But he made clear ViaSat views these proposals, about which little is known, more as curiosities than as competitors.

“If you just look at efficiency measures, the bigger satellites have more payload and are going to be more efficient than satellites with little payloads,” Dankberg said.

“One way to look at it is: I am going to make a lot of them so I’ll make them cheap. Another way is that to have a reasonable ground terminal, I need hundreds or thousands in order to have reasonable look-angles to the satellite, and now you’re trying to make lemonade out of lemons. There is that issue, and then the issue of geographic distribution of the bandwidth. Those are hard economic problems independent of whether the technology works.”