[Satellite News 01-14-11] Damage sustained to the ViaSat-1 satellite at its manufacturing facility has forced ViaSat to pushed back its scheduled launch on an ILS Proton rocket from spring to summer — a setback some analysts believe will impact the company’s 2012 full-year revenues and EBITDA.
    ViaSat said an incident occurred while manufacturer Space Systems/Loral (SS/L) was transporting the Ka-band satellite for testing. ViaSat has not yet taken ownership of the satellite, and SS/L has agreed to cover the cost of the repairs. “The delay provides additional time for repair and testing after the satellite was damaged while being moved during the testing process,” ViaSat said in a statement.
    Nonetheless, Raymond James Analyst Chris Quilty told Satellite News that the launch delay comes with consequences for the operator. “Although management did not disclose the nature of the damage, the relatively short launch delay would seem to suggest that the damage was fairly minor. Loral will undoubtedly perform thorough repairs and quality testing in order to certify the satellite, but ViaSat might still be forced to pay a higher insurance premium due to a presumed greater risk of satellite anomalies,” he said.
    Quilty projects that ViaSat-1 will enter service during the 2011 fourth quarter as opposed to the intended second quarter launch, as the satellite now will likely require an additional 60 to 90 days to reach its intended orbital slot, perform testing and enter service. “This will likely result in a corresponding drop in net additions from 211,000 to 58,000. We are likewise lowering our full-year 2012 revenue estimates by 3 percent and our EBITDA forecast by 13 percent to $191.8 million”
    ViaSat-1 is a crucial element of the operator’s future growth strategy, as the spacecraft will be the highest-capacity satellite in the world at the time of its launch. Positioned in geosynchronous orbit at 115 degrees West, ViaSat-1 will serve the U.S. market with 130 gigabits-per-second of bandwidth — nearly double the capacity offered by Eutelsat’s Ka-Sat satellite launched in December. ViaSat hopes the new satellite will boost its subscriber numbers and deliver high-speed Internet to more than one million customers.
    Loral Space and Communications also is a part owner of ViaSat-1 and has purchased pre-sold capacity on the satellite dedicated to Canadian consumer broadband providers.
    Quilty noted that, despite the delay, investors still show confidence in the satellite’s long-term potential. “ViaSat’s shares declined by about 4 percent yesterday in reaction to the news of the launch delay, but that’s a fairly measured response when compared to the stock’s market-beating 38 percent gain over the past year.”
    Quilty, however, warned that if the repairs take longer than expected, ViaSat could miss its launch window and encounter an even longer delay. “The crowded Proton launch manifest leaves little room for maneuvering. Even without these delays, however, the stock appears fairly valued trading at 11 times our full-year 2011 EBITDA and we are maintaining our market perform rating,” he said.