ViaSat Overhauling WildBlue as it Prepares for Satellite Launch
ViaSat is overhauling its WildBlue satellite-based broadband service, shifting focus to wholesale from retail as it prepares for the launch of a new satellite in 2011, Chief Operating Officer Richard Baldridge told us at the Kaufman Brothers investor conference in New York. Since it bought WildBlue last year for $568 million, ViaSat has maintained WildBlue’s 425,000 subscribers clustered largely around metro markets in the Northeast and Southeast U.S., Baldridge said.
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WildBlue is adding 12,000-15,000 gross subscribers per month and is likely to have 425,000-450,000 when the ViaSat-1 Ka-band becomes operational in mid-2011 at 115 degrees west. The new satellite will have capacity for 1.5 million-2 million subscribers and wholesale will grow to about 80 percent of WildBlue’s business, while retail drops to 20 percent from 45 percent. The wholesale business is more profitable for WildBlue since there are fewer of marketing costs, Baldridge said. As a result, while WildBlue’s average revenue per user may decline to $30 from $41, it will be more profitable because of lower costs, he said.
ViaSat has wholesale agreements with AT&T, DirecTV and Dish Networks, with Dish accounting for about 30 percent of subscribers, Baldridge said. It also has a retail business through National Rural Telecommunications Cooperative members. WildBlue will likely maintain its current subscribers on transponders it leases on Telesat Canada’s Anik F2 satellite.
The new satellite also will enable WildBlue to increase the top transmission speeds to 8 Mbps downstream and 2 Mbps upstream, from 1 Mbps/512 kbps, Baldridge said. The entry-level package, which carries a $49 monthly fee, will move to 1 Mbps/512 kbps, he said. The monthly pricing will likely remain in the $49-$85 range, Baldridge said. ViaSat has improved the service’s Web page load speeds to 5.2 seconds from 16 seconds, he said. “It’s coming very close to fiber,” said Baldridge.
The Space Systems Loral-built ViaSat-1 is designed with a throughput of more than 100 Gbps, ViaSat officials have said. It’s scheduled to launch aboard an International Launch Services’ Proton M rocket in late April at the Baikonur Cosmodrome in Kazakhstan. ViaSat-1 has 56 Ka-band transponders.
ViaSat spent about $400 million on ViaSat-1 and is budgeting another $450 million for ViaSat-2, Baldridge said. ViaSat has issued an RFP for ViaSat-2 and expects to place an order in early 2011 with a goal of launching the satellite in 2014, company officials said. ViaSat expects to get $37 million of the $100 million reserved for satellites in the U.S. government’s $7 billion National Broadband Plan, Baldridge said.