Wildblue Now Offering Free Installation Except in Midwest

Wildblue Communications Inc. will offer free installation for its high-speed Internet via satellite service — except in the U.S. Midwest, where company subscriber numbers are doing quite well, Wildblue announced.

The free installation offer is a continuation of Wildblue’s efforts to push satellite broadband out to rural and remote customers now, before terrestrial alternatives enter the fray.

Wildblue provides high-speed Internet access via satellite to homes and small businesses in communities not currently served, or underserved, by other high-speed Internet providers.

Wildblue offers Internet service in three service packages to consumers and small businesses across the contiguous United States from $49.95 per month, providing download speeds of up to 1.5 megabits per second, and all packages include Internet Service Provider services such as e-mail and Web space, the Wildblue Portal (featuring news, information and entertainment), full-time customer care and an equipment warranty.

Wildblue cut its installation price in January from $179.95 to $79.95 and increased distribution of its equipment through satellite equipment dealers in an effort to jump-start its subscriber numbers. The new free installation offer will run from April 1 through May 15.

"It’s clearly going to help attract customers who were reluctant to spend $179.95 on installation," said Andrea Maleter, Futron Corp.’s technical director. "The question is how long can Wildblue afford to offer free installation? I mean, if it works well for them, I would expect it to extend past May 15th. However, every time you eat costs to attract customers, you dramatically increase your subscriber acquisition expenses; which affects your bottom line. Just ask XM and Sirius; they know what I’m talking about."

Wildblue has begun signing up satellite equipment retailers to distribute equipment and services directly to the public. "We have over 750 small town electronics and TVRO retailers who are now offering Wildblue satellite broadband," said Brad Greenwald, Wildblue’s vice president of sales and marketing. "Some of these used to sell Direcway, but have switched exclusively to Wildblue because our system is easier to install and service. We continue to add new dealers at a rate of 25 to 40 a week."

No Offer In Midwest

Yet, at the same time, Wildblue has suspended sales in the American Midwest, a consequence of Wildblue’s initial sales strategy, Greenwald said. "We began by selling Wildblue exclusively through members of the National Rural Telecommunications Cooperative (NRTC)," he said. "Geographically, they are focused on the Midwest. The result is that our NRTC- based sales have been so successful, that we’ve used up our capacity for this region. But the rest of our territory still has spectrum to spare."

Wildblue hopes that the free installation offer will lead to sales success throughout the United States that matches that of the Midwest, and the company will "soon be solving our Midwest capacity problems through the deployment of new software and new equipment," Greenwald said.

Wildblue launched its service using capacity aboard Telesat Canada’s Anik F2 satellite, and Wildblue plans to launch its first spacecraft, Wildblue-1, aboard an Ariane 5 spacecraft before the end of 2006. The launch of Wildblue-1, manufactured by Space Systems/Loral, will triple Wildblue’s available bandwidth. "Wildblue-1 will help to ensure that we are able to handle 100 percent of customer demand into the foreseeable future," Dave Leonard, CEO of Wildblue, said in a statement.

But until this happens, Wildblue has to balance its desire to push beyond its current subscriber base of 25,000 customers with its ability to actually deliver service.

Still, given the start-and-stop history of satellite broadband in years past, the current challenges facing Wildblue are an improvement. What remains to be seen is whether this company can get a sizable stake in rural America while it’s still relatively undisputed turf.

"Wildblue’s tactics will enable them to capitalize on their current window of opportunity before terrestrial alternatives start to close in," Maleter said. Time will tell just how progress they can make – and how much they can support and finance – before competition begins.