How large is the market for satellite-connected business jets? Gogo will commit more than $50 million over four years to purchase satellite capacity on the OneWeb constellation to make sure it has sufficient bandwidth available for upcoming installations.
The company announced the deal in an SEC filing on Tuesday.
The “Take or Pay” deal commits Gogo to the capacity and expense, whether it consumes the bandwidth as a reseller or not. Yearly details are redacted in the filing, but the total commitment is $52,500,000 for the contract period. Presumably the commitment amounts increase annually, allowing Gogo to ramp up its installation base. Gogo also has an option to extend the contract term.
Gogo and OneWeb Eutelsat will cooperate to create “bespoke” pricing plans, though Gogo will also have the option to consume “catalog” plans as a reseller and distributor in the BizAv world. The plan options are not detailed, but appear to be based on committed data speeds from OneWeb.
Should Gogo’s actual consumption be greater than the minimum for any quarterly reporting period to OneWeb the excess can be used to offset future minimums.
Also of note, OneWeb type approval of the “HDX” antenna, currently installed on a Challenger 300 and undergoing testing, is a gating element for activation of the payment obligations. The larger “FDX” antenna will eventually also become approved on the OneWeb network, but its certification timing does not impact the payment obligation.
More on the Gogo Galileo project:
- Gogo, OneWeb team for BizAv satellite service
- Gogo grabs Hughes ESA exclusivity for BizAv OneWeb service
- Gogo gets first antenna installed for Galileo testing
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