New Viasat Satellite Faces Uncertain Future, Company Says It's Still Making Inroads in Channel
Viasat said it would share more information during the company’s earnings call next month.
July 24, 2023
Channel Futures: Consider all the benefits you’re espousing, why would somebody need fiber when they can use satellite?
Viasat’s Tessley Smith: Fiber is probably going to offer in some areas that we don’t. We ’re well aware of that. I think that’s the good thing about where we play. We … own who we are and where we play well. We’re not out to replace fiber; we’re the company that everybody should be saying, if we have a business, we should be a redundant or tertiary solution, because nobody wants to go down.
There are also capacity restrictions. That’s why we keep building new satellites, because it’s not unlimited. I think it’s fair to say that we wouldn’t be able to serve the entire United States at one time. However, we’re doing things that have never been before seen in the satellite industry. The big players — American Airlines, Southwest — now are using us. The neat thing is, let’s say it’s really busy on the East Coast before the West Coast wakes up, we can direct the capacity that we have to some of these airlines in the East Coast when they’re launching these early flights. And as it gets busier on the West Coast, we can direct that capacity to them. But back to your point, if we had over 300 million people trying to pull from our satellites, it would restrict capacity. We’d have to build out more. So, it’s kind of who we are and where we can direct our capacity.
CF: When you say NFL cities, what do you mean by that regarding satellite?
TS: We’re referring to most of the areas where NFL football teams are, where there’s a higher population count. Let’s say if you go to middle New York and Manhattan, it’s going to make sense for somebody to build out fiber connectivity, even if it’s millions of dollars to build that out. Your cost per capita goes down because you’re going to have more subscribers. It’s just business.
However, in smaller towns and rural areas we’re doing what nobody else has ever done. We’re providing speeds so that kids in these areas have a fair advantage to be able to compete academically. The throughput that we’re going to be seeing, nobody has ever done it in the satellite industry.
CF: Do you target partners in rural areas? Is that what the partner program is all about?
TS: We’re doing a lot of grassroots kind of production. We work with all the all the major TSDs and have great relationships with those. But we also have some top partners that are selling in metro areas.
CF: If something goes wrong in a rural area, how do you get service quickly to some of these regions?
TS: We can, and we have plenty of partnerships that I can’t name for legal reasons. But we have strong partnerships across the United States. And we really hit our three-to-five-day installs. And we also have people that we will call on, retailers or dealers, that actually sell our stuff. We certify them. Some of these people that are certified are doing these installs for us. We have nationwide coverage.
CF: When it comes to the channel program itself, what has changed in the last few years? And are you planning to expand the channel program going forward?
TS: I think my predecessor did a great job of establishing our relationships at a high level with TSDs. But our focus, again, is really to get more grassroots. We need to recruit and get the right partner. If we want to connect the unconnected, we need to find some of these grassroot partners and some of these locations and cities, train them, and really get them in the areas where I think we can make an impact — not just in the U.S. but around the world.
So we’re in hiring phase two. We’re going to hire another channel manager and have emphasis on the West Coast. We’re also looking to expand in the upper Northeast. However, it’s a nationwide approach. And I think with the launch of ViaSat-3, our team is going to have to not just double but even triple in the next six months to a year.
CF: Changing gears, what are some of the more notable products coming out of Viasat?
TS: I feel like we’re going to have the best satellite product in our arena with the launch of the ViaSat-3. I think we’re going to have the market cornered as far as speeds and throughput. On the business side, we have a solutions focus for the businesses, meaning we’re working on some backup, some redundancy solutions and even some SD-WAN solutions. We talked about how we don’t even see fiber and some of these other companies as a threat, because what we’re trying to do is bring these products together to create a true solution. And that’s what we’re proposing and working on internally. Much of what our CEO talks about is that we’re a software company; we’re constantly developing. And I think on the channel business side, that’s where we’re going to. We don’t want to just say, “Hey, here’s satellite service.” We want to come in and say, “Hey, this is a solution. This is how we pair it. This is the product we paired it with. And this is the problem that it solves.”
Also, I think we’re known as an SMB play or a rural area play, and we’ve actually outgrown that. And with ViaSat-3, I think we’re going to change the game of what people think about satellite.
CF: If I am reading you correctly, it’s not that you’re just appealing to the rural segment of the population where there are holes in service, but in major cities you can fill the void, too.
TS: Yes. 100%.
CF: You have all these innovations coming out in the next few years? How does that change the formula for a partner?
TS: I think in the next 30-60 days or so when our new plans are launched with ViaSat-3, the conversations are going to change. Our feature set will change with it. And the capacity and speeds, again, will be unheard of.
CF: How did you get that contract with Air Force One? How did that come about?
TS: Ha. That’s a different department. I would love to know that, too. I would imagine it’s a combination of the work that Viasat has done with our government over the years. I spoke to you briefly about some of the technologies and capabilities that our frontline fighters are leveraging. What used to take roughly around 14 minutes now takes under like 45 seconds in terms of communication for frontline fighters. So, I think that it was a blend of probably years of Viasat proving itself as a quality tool that enabled us to make that deal. But again, that is definitely not my area of expertise.
CF: How did you get that contract with Air Force One? How did that come about?
TS: Ha. That’s a different department. I would love to know that, too. I would imagine it’s a combination of the work that Viasat has done with our government over the years. I spoke to you briefly about some of the technologies and capabilities that our frontline fighters are leveraging. What used to take roughly around 14 minutes now takes under like 45 seconds in terms of communication for frontline fighters. So, I think that it was a blend of probably years of Viasat proving itself as a quality tool that enabled us to make that deal. But again, that is definitely not my area of expertise.
A new Viasat satellite launched in April with high hopes it would provide substantially more internet connectivity to the United States. However, as was discovered earlier this month, the mission to unfurl the ViaSat-3 Americas satellite’s large mesh antenna went awry, materially impacting the performance of the satellite, according to Viasat officials.
Ars Technica reported that the satellite is “one of the most powerful commercial spacecraft ever built, with two solar array wings as wide as a Boeing 767 jetliner capable of generating more than 30 kilowatts of electricity.”
In a statement to Channel Futures, Viasat said: “We had an unexpected event during the deployment of one of the [satellite’s] reflectors which may materially impact the ViaSat-3 Americas satellite. Our team is working very closely with our reflector manufacturer to take corrective action.”
Yet, they are still in the early stages of working through the event and its root cause and expect to gather additional data in the coming weeks. Viasat said they would share more information during the company’s earnings call next month.
New Viasat Satellite Costs, Concerns, Hopes
The cost of the new Viasat satellite mission was $700 million, but the company is insured for only $420 million.
When Channel Futures sat down with Tessley Smith, the company’s director of business sales, earlier this summer, we didn’t know the issues surrounding the satellite.
At the time, Smith discussed the future of Viasat’s channel initiatives and how they would play out considering the launch of ViaSat-3. The goals the company envisions for the channel may very well be a reality, with or without the satellite getting repaired.
Viasat’s biggest claim to fame may be that it provides communications services to Air Force One. In this interview with Channel Futures, Smith talks about that. However, the real story is how this multibillion-dollar global company is offering high-speed satellite internet that can connect people where other companies can’t. This is a big feat as there are, according to the FCC, still 19 million people in the U.S. that can’t get internet with broadband speeds. So Viasat’s primary goal is to connect the unconnected, whether that’s in the U.S. or internationally, Smith said.
Viasat’s Tessley Smith
Smith has been on the job for 10 months. In that time, a lot has occurred, such as the launch (literally) of the company’s ViaSat-3 constellation, a next-generation ultra-high capacity, Ka-band satellite which is expected to enable billions – those in homes, businesses, on planes and at sea, and in off-the-grid communities – connect to information.
“We’re going to be able to play in a lot of areas maybe we didn’t in the past,” Smith said of the new satellite.
How does the channel and partners fit into the equation? Smith delves into that and how that channel is evolving for Viasat, including tripling the size of the company’s partner program.
CF: I don’t want to harp too much on the pandemic and supply chains because everybody in the in the channel had some kind of impact with supply chains. Can you safely say some of those issues have been resolved?
TS: The pandemic impacted supply chains, and therefore kind of made things a little bit longer than typical were we not in a pandemic. So that’s kind of the one thing to think about. So moving forward as we move to deploy ViaSat-3 EMEA and then ViaSat-3 APAC, we anticipate those production cycles to be getting shorter and shorter.
See the slideshow above for the rest of our Q&A with Smith and our conversation about the new Viasat satellite.
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