We’re a couple years out from the ViaSat-3 satellite delivering a massive boost in Ka-band satellite capacity over Europe, but Viasat is ready to scale up its offerings on the continent. The company will buy out Eutelsat‘s stake in their joint venture (“EBI”) for 140 million euro, giving Viasat full control over the wholesale business as well as the KA-SAT satellite. Viasat was a 49% shareholder in the business under the prior agreement.
By gaining full control of KA-SAT, Viasat can further expand its growing mobility business as well as establish operations and market presence ahead of our ViaSat-3 service launch, including the introduction of new capabilities enabling high-speed, high-bandwidth ‘ViaSat-3-like’ home internet service plans in select European markets.– Keven Lippert, chief commercial officer, Viasat
The relationship between Viasat and Eutelsat, announced in February 2016 and closed in March 2017, has been on shaky ground since early 2018 when Eutelsat announced it would launch its own KONNECT VHTS satellite rather than invest in the European component of the ViaSat-3 constellation. Things became even more bleak earlier this year when Eutelsat purchased Bigblu Broadband to develop its retail direct sales channel.
With the full capacity of its French and Italian coverage on the KONNECT satellite spoken for through wholesale deals with Orange and TIM, respectively, the Bigblu retail option also in play, and the KONNECT satellite in service with KONNECT VHTS coming soon, Eutelsat is now ready to end the Viasat venture.
The deal calls for Eutelsat to continue operating the ground segment for KA-SAT in the transition period while EBI will continue to deliver capacity for Bigblu to ensure subscriber continuity.
Eutelsat CEO Rodolphe Belmer notes that the move plays well into the company’s roadmap, “It completes the reorganization of our broadband distribution set-up for Europe following the wholesale agreement with Orange for France and the acquisition of Bigblu Broadband Europe covering other major markets. With the recent entry into service of EUTELSAT KONNECT, to be followed by the launch of KONNECT VHTS, we are optimally placed to assure the rapid ramp-up of these new generation in-orbit assets in the coming years.”
The wholesale business adds to Viasat’s established retail broadband services business in Europe where Viasat offers enhanced home internet service in Spain, Norway, and Poland. The Company also delivers in-flight connectivity to seven European airlines as well as international airlines that fly into Europe via the KA-SAT satellite. With the increased capacity at hand Viasat can scale up its offerings on the ground in targeted markets, increasing allowances where the capacity is available. The company hopes to use the short-term capacity growth as a catalyst into the market when ViaSat-3 comes online over Europe.
Holding full control of KA-SAT will also give Viasat a level of redundancy and augmented capacity as its global footprint takes shape. Layering the coverage proves particularly useful in the mobility segment (including in-flight) as demand ebbs and flows around hubs, for example.
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