Broadband-by-satellite provider ViaSat (of California) turned in some impressive Q3 numbers on February 7th, with CEO Mark Dankberg saying that a new satellite in the company’s ViaSat-3 model had been ordered from Boeing, and would likely launch in early 2021.
Dankberg explained that the progress on the first two ViaSat-3 satellites, “and now having executed a third Asia Pacific satellite with Boeing, we believe we are well positioned to capture a good portion of the global market.”
Equity analyst Giles Thorne at investment bank Jefferies, said: “It was another quarter of all revenue lines accelerating growth, most notably Commercial Networks (+123.8 per cent y-o-y from +103.5 per cent / +109.8 per cent in Q2 19 / Q1 19, higher year installs of aviation equipment, though management admit that Q3 19 was a “bulge” quarter) and Satellite Services (+22.9 per cent y-o-y, from +10.4 per cent / +0.9 per cent.
However, while praising ViaSat’s enviable growth in its ‘Mobility’ division the bank was not impressed with the near-static growth in terrestrial subscribers. “We still question the anaemic subscriber growth (there is none, at least not sequentially, “essentially flat but up from 577,000 in Q3 18” – which probably means down q-o-q from +8,000 / +1000 q-o-q in Q2 19 / Q1 19) given the ViaSat-2 enabled plans went live a year ago now and the market opportunity is large. This was the third full quarter of impact and still no pick-up in net additions – we understand that subscriber acquisition is too one-dimensional a KPI (we need to focus on the economic value of the pool of subscribers, not its absolute size) but given the headroom in the spare capacity post the ViaSat-2 launch, we think some inflection would have been in evidence by now. Notwithstanding, the message remains consistent and backed up by the KPIs: mix shift within the subscriber base to retail and higher value plans – ARPU grew +14.2 per cent y-o-y (from +10.4 per cent / +8.7 per cent).