ViaSat Confirms New LEO Constellation Plans, Record-Breaking Q4 Results
Satellite operator Viasat reported record-breaking revenue increases and subscriber growth, and dropped a surprise revelation that it was scrapping its planned Medium-Earth Orbit (MEO) constellation for a new Low-Earth Orbit (LEO) constellation that will launch in approximately five to six years — all during its Fourth Quarter (Q4) 2020 and full-year results call on May 26.
Viasat executives on the call said they were confident that the LEO constellation will receive subsidy funding from the FCC’s $16 billion Rural Digital Opportunity Fund (RDOF) for U.S. broadband services.
Viasat’s full-year 2020 revenues increased 11.7% Year-over-Year (YOY) to $2.3 billion and its Q4 2020 quarterly total revenues increased 6.2% YOY to $591.7 million — its ninth consecutive quarter of growth. While new contract awards had been declining due to the COVID-19 pandemic, the operator said its Satellite Services and Government Systems divisions drove the surge, backed by a sustained sales backlog. Service revenues rose 10.5% to $292.7 million, with revenues specifically from satellite services increasing 11.8% YOY to $212.4 million — a record for the California-based operator.
Average revenues per user spiked 13.5% YOY to $93.06 primarily driven by the addition of new subscribers to premium broadband service plans due to increased COVID-19 shelter-in-place orders. Despite the uncertainties related to COVID-19 pandemic, Viasat’s in-flight service revenues jumped 13% year over year. Finally, Viasat reported that it added an impressive 590,000 U.S.-based fixed broadband subscribers as part of the FCC’s “Keep Americans Connected” pledge.
In regards to the operator’s plans for LEO, Viasat CEO Mark Dankberg said that the company is paying close attention to FCC guidelines for rural broadband subsidiaries. “We had a purpose in mind for the MEO constellation, but the biggest factor in wanting to go [to LEO] is really the amount of funding that the FCC is aiming at low specifications,” said Dankberg during the earnings call. “[A LEO constellation] does involve more satellites than we would have used in MEO, but the satellites are a lot smaller and less expensive than they otherwise would be, but the main attraction is that things are evolving, but assuming that the FCC does allow LEO to be eligible in the Phase II part of the Rural Digital Opportunity Fund. The opportunity for funding is far in excess of the increase in what the constellation would cost. So that’s the main reasoning behind it.”
Dankberg added that the constellation won’t be in place until approximately 2026, and that the company is still continuing plans to build additional satellites beyond ViaSat-3 and ViaSat-4.
In a separate story published today, Via Satellite reported that another constellation operator, OneWeb, announced and explained why it requested permission from the FCC to expand its LEO constellation to 48,000 satellites.