Market for Space-Based Internet Service Heats Up for ViaSat

8/16/10Follow @bvbigelow

It appears that the competition to provide satellite-based Internet service is heating up for ViaSat, the Carlsbad, CA-based defense contractor, at least judging from an account today by Susanna Kim in the New York Times.

As I reported earlier this year, ViaSat has placed a billion-dollar bet on creating space-based Internet service as a new commercial business. In 2008, the company announced it had decided to order its own $450 million communications satellite, ViaSat-1, from Palo Alto, CA-based Space Systems/Loral. ViaSat put the other piece together last October, with the $568-million acquisition of WildBlue, the Denver, CO-based Internet service provider.

The scale of the gamble is substantial. Before commissioning ViaSat-1, the Carlsbad company was generating almost $500 million in annual revenue, and specialized in satellite-based communications equipment used primarily by military customers. Its product line includes data modems that fit in the noses of jet fighters and mobile ground stations used by military ground forces to communicate.

Mark Dankberg

Mark Dankberg

In our interview, ViaSat CEO Mark Dankberg told me he felt the company had a comfortable lead when they made the decision in 2007 to order a satellite optimized for Internet service with an extremely high data rate of more than 100 gigabits per second. ViaSat (NASDAQ: VSAT) plans to launch ViaSat-1 next year. But ViaSat now faces a challenge from Germantown, MD-based Hughes Network Systems, although the Times is non-specific about ViaSat’s lead, saying both companies plan to launch broadband satellites “in the next couple of years.” (Hughes also chose to order its satellite from Space System/Loral, a subsidiary of Loral Space & Communications, which must have been somewhat of a surprise at ViaSat.)

As the Times notes, other Internet service providers also are moving to … Next Page »

Bruce V. Bigelow is the editor of Xconomy San Diego. You can e-mail him at bbigelow@xconomy.com or call (619) 669-8788 Follow @bvbigelow

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