Viasat reexamined after potential lost satellite
July 31, 2023
ViaSat-3 Americas is a potential lost satellite having suffered a malfunction on its giant antenna following its launch. A report from analysts at Quilty Space says: “[The problem with the satellite], after a heartbreaking seven years in the making saw shares of VSAT plummeted 30 per cent in the immediate aftermath despite management’s assurances of contingency plans aimed at minimising the economic impacts of the loss.”
Viasat will update the market on the satellites condition on August 9th along with the company’s latest financial numbers.
However, Quilty says there is a path forward for Viasat, noting: “But its growth, capacity, and post-Inmarsat deleveraging story is delayed as it’s now faced with reshuffling its satellite fleet and reprioritising capacity and key segments, including in-flight connectivity (IFC).”
It adds: “With an estimated $420 million insurance claim now at stake and the fate of ViaSat-3 (VS-3) largely unknown, we explore why this might not be the Viasatastrophe the market is fearing.”
Quilty reminds that there are clear options for Viasat:
1: Reposition an already on-orbit or scheduled satellite: Because it was specifically optimised and designed for the Asia-Pacific region, the ViaSat-3 APAC satellite is not a candidate to be moved. The next available replacement asset is the ~300 Gbps Inmarsat GX7, not launching until 2025. A pivot to the Americas with ViaSat3’s second satellite limits Viasat’s market penetration in Europe, the Middle East & Africa (EMEA), but the North American market will most likely prevail. We predict that Viasat moves EMEA to the Americas.
2: Build a replacement satellite: With plans for ViaSat-4 underway since 2019, Viasat will have to decide between possibly building another VS-3 spacecraft or pressing on to the next-generation VS-4. Either way, it’s a minimum three-year satellite manufacturing time.
3: Purchase or partner for new capacity: North America has been capacity-constrained for years. But in mid-2022, SES brought the ~150 Gbps SES-17 online, and Hughes is expected to launch its 500 Gbps Jupiter-3 satellite by year-end [Ed: Now launched]. Cutting a deal with longtime competitor Hughes is less likely than Viasat leasing capacity on the underutilised SES-17.
The report talks of another option, which is that Viasat quits its consumer-facing broadband business in order to maintain its obligatory minimum service levels for commercial clients.
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