On February 3, Viasat announced the delay of the ViaSat-3 broadband satellite launch from early 2022 to an anticipated late summer launch. On a call with investors, Viasat CEO Rick Baldridge alluded to pandemic disruption affecting not only parts and materials supply chains but also the availability of specialized workers with skills he described as “critical.”
Acknowledging the ongoing uncertainty due to potential emergence of new COVID-19 variants, Viasat executive chair Mark Dankberg still affirmed Viasat’s intent to have the first ViaSat-3 satellite launched and online in 2022.
The ViaSat-3 launch disruption popped up quickly when the Omicron variant surged around the United States. In an interview just last December, Viasat’s COO Kevin Harkenrider expressed confidence in the joint Viasat-Boeing satellite launch time frame. Harkenrider noted that Viasat had been “lucky” to that point to avoid significant disruption, pointing to spread mitigation practices at Viasat facilities. Despite Viasat’s efforts, the communications giant ultimately joined countless other companies unable to dodge disruption from the exponentially more transmissible Omicron variant.
This latest delay is one of a series weathered by Viasat. Challenges with a supplier initially delayed the planned 2019 ViaSat-3 launch to 2020. Pandemic delays pushed the launch out yet again to an anticipated 2021 timeline.
Every delay in launching the first ViaSat-3 satellite affects the subsequent timeline for the second and third satellites under preparation for launch, positioning, and operational status. The working timeline for the constellation of the high-powered broadband satellites consists of six months between each launch. Once the multi-ton satellites are positioned in geostationary orbit, each is expected to provide broadband coverage to different regions of the globe. The estimated price tag for the ViaSat-3 constellation of satellites is $2.3 billion.
Viasat has agreements with three different launch partners for each ViaSat-3 satellite launch. The first launch will be executed by SpaceX, utilizing its Falcon Heavy rocket.
Despite the launch delay, preparations continue to move forward. The ViaSat-3 payload with its Boeing module is currently at Boeing facilities, where Boeing is preparing the integrated unit for thermal vacuum testing. At Viasat facilities, the second ViaSat-3 satellite payload has been almost completely integrated with its Boeing module, with approximately 95% of units in place. When complete, the second payload can begin its journey to Boeing.
In its financial results review, Viasat leadership remained confident that the launch delay would not substantively impact its financial outlook. Viasat reported to investors that adjusted “earnings before interest, taxes, depreciation and amortization” (or EBITDA) grew to $163 million.
Viasat’s executive chair Mark Dankberg expressed optimism about room in the market for multiple satellite communications providers. When one analyst questioned ViaSat-3’s appeal against the growing expansion of Starlink satellite internet coverage, the executive chair pointed to Viasat’s track record of robust vertical integration for enterprise customers.
The question came on the heels of a SpaceX announcement that Starlink is taking reservations for premium satellite broadband service for business and enterprise users. Previously, Starlink had concentrated services on residential subscribers in rural and underserved areas. The company has been busy attempting to scale up its own satellite launches and home satellite dish production. The Starlink program has also been plagued by supply chain issues, which have caused delays in manufacturing and delivering residential satellite dishes. Starlink promises Premium business subscribers higher speeds and low latency even in peak hours, with download speeds estimated between 150-500 Mbps. Each ViaSat-3 satellite is also expected to provide speeds greater than 150 Mbps.
As Dankberg noted, Viasat provides not only satellite broadband, it also delivers integrated suites of hardware products; services; software; networks and systems; and cybersecurity solutions. Viasat’s history of strategic acquisitions has bolstered its integrated product platform.
Continuing its history of strategic acquisitions, Viasat recently acquired companies Euro Broadband and Rignet. Previously, Euro Broadband had been a shared project between Viasat and Eutelsat. Along with sales and increased service revenue, these acquisitions helped propel record revenue growth for the final three months of 2021. Viasat reported revenue of $720 million for that period.
In November 2021, Viasat announced plans to acquire Inmarsat, a British satellite company, in a $7.3 billion deal. Since the announcement, Viasat has carried out multi-jurisdictional regulatory filings, notifications to the U.S. Department of Justice, and other procedural benchmarks to move the process forward. A shareholder meeting to approve the purchase is expected later in 2022.
If the various requirements are met and the acquisition moves forward, Viasat will gain a significantly expanded global network ranging across Ka, L, and S-band spectrums. Inmarsat also has 14 satellites in orbit currently, with another seven being built.
But it’s the Inmarsat plans to launch a low-orbit satellite constellation that may be especially beneficial for Viasat. For several years, Viasat has considered various options to reduce latency in its satellite broadband communications. Enhancing ViaSat-3 high-capacity transmission with a low-latency, low-orbit constellation would sharpen Viasat’s competitive edge.
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