Viasat Expands Multi-Orbit Connectivity Strategy Amid Growing Competition

Viasat is actively engaging with multiple low Earth orbit (LEO) constellations to enhance multi-orbit connectivity across its mobile broadband services.

Following their recent announcement to integrate OneWeb’s low-latency LEO broadband for maritime customers, Viasat are working similar agreementsfor aviation and other enterprise markets.

“We actually are working with almost all of the [non-geostationary operators],...we will be mixing and matching as appropriate based on the deals.” - Mark Dankberg, Viasat CEO

Presently, OneWeb and Starlink are the only operational high-speed LEO broadband networks, with Amazon’s Project Kuiper anticipated to offer early services later this year. Additionally, Telesat’s Lightspeed and Rivada Networks’ OuterNet are set to become operational in the coming years.

The integration of these networks presents challenges due to differing frequency bands. OneWeb’s network operates in Ku-band, whereas Viasat’s geostationary (GEO) satellites for its NexusWave service utilize Ka-band. This necessitates separate user terminals for integration.

“Shipboard operators seem to be completely fine with the notion of having separate LEO and GEO antenna components,” - Mark Dankberg, Viasat CEO

Viasat is initially targeting the maritime sector with its multi-orbit offering. Future networks from Amazon, Telesat, and Rivada, operating in Ka-band frequencies, may simplify integration. Meanwhile, Starlink has partnered with GEO and medium Earth orbit operator SES to offer a unified service for cruise liners. Although GEO satellites excel at providing substantial broadband capacity to high-demand areas, the lower latency of LEO satellites, due to their proximity to Earth, is increasingly sought by customers.

Strategic Partnerships and Market Position

Despite these developments, Viasat has no plans to deploy its own LEO constellation.

“Our focus is on creating an ecosystem of partnerships...In the LEO world, there’s a lot of excess capacity,” - Guru Gowrappan, Viasat President

Viasat’s NexusWave service is expected to launch by the end of June, contingent on OneWeb resolving ground network issues for global coverage.

Financial Performance and Industry Consolidation

Viasat reported a record revenue of $4.3 billion for the fiscal year ending March 2024, a 68% increase from $2.6 billion the previous year, driven largely by its acquisition of British satellite operator Inmarsat. This growth was fueled by strong performance in government and aviation sectors, despite Starlink's competitive pressure.

In April, SES announced a $3.1 billion deal to acquire Intelsat, joining a wave of consolidation that also saw Eutelsat merge with OneWeb last year.

“Competition is good...this really says that the market is large and growing, and you’re going to have a lot of competition...not a winner-takes-all market” - Guru Gowrappan, Viasat President

Viasat’s adjusted EBITDA soared 181% year-on-year to $1.4 billion for fiscal year 2024. However, the company recorded a net loss of $1.1 billion, largely due to $905 million in net write-down charges from the failures of the ViaSat-3 F1 and Inmarsat-6 F2 satellites and the canceled ViaSat-4 program.

The ViaSat-3 F1 satellite, the first of three Boeing-provided spacecraft with a one terabit per second capacity, is set to begin commercial service in mid-2024, albeit with less than 10% of its capacity following an antenna deployment failure. Viasat has so far received 55% of ViaSat-3 F1’s $421 million insured value and the full $348 million claim for Inmarsat-6 F2.

The subsequent ViaSat-3 F2 and F3 satellites are on schedule to launch and commence service in the latter half of 2025 across the Americas and Asia Pacific, respectively. ViaSat-2 F1, currently over the Americas, will be repositioned to cover Europe, the Middle East, and Africa after F2’s launch.

Viasat anticipates flat revenue for fiscal year 2025, projecting increased business from government and airline customers but a decline in U.S. fixed broadband revenue amid fierce competition from Starlink. The company’s shares closed at $15.74 on May 22, down over 16% following the earnings announcement.