Space Race: Satellite Broadband Comes of Age

April 22, 2015
ViaSat (NASDAQ:VSAT) and Boeing (NYSE:BA) recently announced the launch of what is being called the Flexible Broadband System ...
ViaSat (NASDAQ:VSAT) and Boeing (NYSE:BA) recently announced the launch of what is being called the Flexible Broadband System. It's intended to allow regional providers to offer a 12 Mbps download/2-3Mbps upload Internet service internationally. This will be akin to Exede Internet, which ViaSat provides in the United States.

The company is preparing to launch ViaSat 2 satellite next year, which will expand coverage and provide new capabilities for Exede and the Flexible Broadband System. However, with the announcement of the latter, ViaSat and Boeing hope to motivate the regional providers to invest in the launch of more satellites to create a global footprint for the space-based Internet service.

"This creates a consortium roaming network, where each could send traffic to each other's networks," said Tom Eidenschink, VP at ViaSat.

The "Flexible" part of the service's name reflects the ability to allocate capacity where and when it is needed. With the trend continuing toward personal consumption, wireless systems need to deliver this capacity to every user wherever they are, and to dynamically modify where the capacity goes depending on where it is being consumed. Instead of having the capacity blanketed across the United States, for example, there could be more in denser areas, which will provide consistent service regardless of location, Eidenschink said.

ViaSat has had success already with Exede, Eidenschink said. While in the past, satellite broadband was considered a last resort that subscribers selected only if there was no other choice, 30-40% of Exede's new subscribers today have chosen it over an available terrestrial service. ViaSat also provides an in-flight WiFi service on domestic Jet Blue and United flights.

"With (other in-flight WiFi) systems, because of economics or capacity, not a lot of people have used it," Eidenschink said. "Take rates (have been) 5-8%. With our system ... over half the people on the flights are using in-flight WiFi."

The launch of ViaSat 2 will help the company expand its service to international flights as well, particularly in Europe. If Flexible Broadband System partners sign on in other regions, South America and Southeast Asia, for example, the company could provide reach there, too.

"We are working on technology to enable providers to operate on our satellites and conventional satellites," Eidenschink said. This is comparable to the concept of having 4G in one area, but being able to roam and still have 3G or 2G coverage where 4G is not available.

About the Author

BTR Staff

EDITORIAL
STEPHEN HARDY
Editorial Director and Associate Publisher
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MATT VINCENT
Senior Editor
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SALES
KRISTINE COLLINS
Business Solutions Manager
(312) 350-0452
[email protected]
JEAN LAUTER
Business Solutions Manager
(516) 695-3899
[email protected]

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