We are an innovator in broadband technologies and services. Our end-to-end
platform of high-capacity Ka-band satellites, ground infrastructure and user
terminals enables us to provide cost-effective, high-speed, high-quality broadband
solutions to enterprises, consumers and government users around the globe, whether
on the ground, on the move or in flight. In addition, we develop and provide
advanced wireless communications systems, secure networking systems and cybersecurity
and information assurance products and services. Our product, system and service
offerings are often linked through common underlying technologies, customer
applications and market relationships. We believe that our portfolio of products
and services, combined with our ability to effectively cross-deploy technologies
between government and commercial segments and across different geographic markets,
provides us with a strong foundation to sustain and enhance our leadership in
advanced communications and networking technologies.
During the third quarter of fiscal year 2017, we completed the sale of an aggregate
of 7,475,000 shares of Viasat common stock in an underwritten public offering.
Our net proceeds from the offering were approximately $503.1 million after deducting
underwriting discounts and offering expenses. We used $225.0 million of the
net proceeds from the offering to repay the then-outstanding borrowings under
our revolving credit facility (the Revolving Credit Facility).
We conduct our business through three segments: satellite services, commercial
networks and government systems. Financial information regarding our reporting
segments and the geographic areas in which we deliver our services and products
is included in the consolidated financial statements and notes thereto.
Satellite Services
Our satellite services segment provides satellite-based high-speed broadband
services to consumers, enterprises, commercial airlines and mobile broadband
customers both in the United States and abroad. Our Viasat Internet and Viasat
Business Internet fixed broadband services (formerly provided under the Exede®
and WildBlue® brands) offer high-speed, high-quality broadband internet
access. We also offer high-speed internet and other in-flight services for a
growing number of commercial aircraft. Our satellite services business also
provides a platform for the provision of network management services to domestic
and international satellite service providers.
Our satellite services business uses our proprietary technology platform to
provide satellite-based high-speed broadband services with multiple applications
to consumers, enterprises, commercial airlines and mobile broadband customers.
Our proprietary Ka-band satellites are at the core of our technology platform.
The ViaSat-1 satellite (our first-generation high-capacity Ka-band spot-beam
satellite) was placed into service in January 2012. On June 1, 2017, our second-generation
ViaSat-2 satellite was successfully launched into orbit. In January 2018, we
reported an antenna deployment issue identified by the satellite manufacturer,
for which root cause analysis is still under investigation. Based on measured
data and analysis of the current in-orbit performance of the satellite as well
as the network as a whole, we currently expect that the issue will not materially
impact the overall coverage area of the satellite, nor materially impact the
planned services and the expected financial results from the ViaSat-2 system.
In the fourth quarter of fiscal year 2018, we launched commercial broadband
services on our ViaSat-2 satellite. Our ViaSat-2 satellite significantly expands
our data throughput capacity and supports the flexible allocation of capacity,
enabling us to improve the speed, availability and geographic coverage area
of our broadband services and dynamically respond to changing capacity demands
across different geographic areas and service offerings. We currently have two
ViaSat-3 class satellites under construction, and anticipate commencing construction
on a third ViaSat-3 class satellite in the future. Our ViaSat-3 class satellites
are our third-generation high-capacity Ka-band satellite design and are designed
to further expand our data throughput capacity and geographic coverage area
and enhance our ability to flexibly allocate capacity, thereby improving the
speed, availability and cost-efficiency of our proprietary Ka-band satellite
network. Launch of commercial service on the first ViaSat-3 class satellite
is currently targeted for the second half of calendar year 2020. We also own
the WildBlue-1 satellite, which was placed into service in March 2007.
We believe that growth in our satellite services segment will be driven in
the coming years by continued rapid growth in demand for high-speed broadband
services across the globe, driven both by continued increases in the number
of internet users and connected devices and by increasing data usage, including
for video streaming and mobile and in-flight connectivity (IFC). Growth in our
in-flight services business in the coming years is also expected to be driven
by the installation of our IFC systems on additional commercial aircraft, with
installations anticipated on approximately 955 additional aircraft under our
existing customer agreements with commercial airlines as of March 31, 2018.
The primary services offered by our satellite services segment are comprised
of:
Fixed Broadband Services. Our satellite-based fixed broadband services provide
consumers and businesses with high-speed broadband internet access and Voice
over Internet Protocol (VoIP) services. We provide fixed broadband services
primarily in the United States, as well as in other markets such as Europe and
Mexico. We offer a range of service plans, including unlimited data plans and
plans with up to 100 Mbps download speeds, with pricing and available service
offerings based on a number of different factors, including available capacity,
bandwidth limits, service quality levels, bundled offerings, terms of distribution
and geographic location. We also offer wholesale and retail fixed broadband
services to our national, regional and foreign distribution partners, including
direct-to-home satellite video providers, retail service providers and communications
companies. As of March 31, 2018, we provided fixed broadband services to approximately
576,000 subscribers. In addition, we offer satellite-enabled community Wi-Fi
hotspot services to provide affordable and reliable high-speed internet connectivity
in unserved and underserved communities, primarily in Mexico.
In-Flight Services. Our award-winning in-flight services provide industry-leading
in-flight internet and aviation software services to commercial airlines. The
data throughput capacity of our IFC systems enables commercial airlines to offer
more passengers on more flights the ability to enjoy high-speed internet services
such as streaming video. As of March 31, 2018, 635 commercial aircraft were
in service across the United States, Europe and Australia utilizing our Viasat
IFC systems.
Mobile Broadband Services. Our mobile broadband services provide global network
management and high-speed internet connectivity services for customers using
airborne, maritime and ground-mobile satellite systems.
We also offer a variety of other broadband services, including business connectivity,
live on-line event streaming, oil and natural gas data gathering services and
high-definition satellite news gathering.
Commercial Networks
Our commercial networks segment develops and produces a variety of advanced
satellite and wireless products, systems and solutions that enable the provision
of high-speed fixed and mobile broadband services. Our products, systems and
solutions include an array of satellite-based and wireless broadband platforms,
networking equipment, space hardware, radio frequency and advanced microwave
solutions, space-to-earth connectivity systems, customer premise equipment (CPE),
satellite modems and antenna technologies, as well as satellite payload development
and ASIC chip design. Our products, systems and solutions are generally developed
through a combination of customer and discretionary internal research and development
funding, are utilized to provide services through our satellite services segment
and are also sold to commercial networks customers (with sales of complementary
products, systems and solutions to government customers included in our government
systems segment).
We believe growth in our commercial networks segment will be driven in the
coming years by continued growth in worldwide demand for mobile and fixed connectivity,
ground networking equipment and products that enable or support access to high-speed
broadband services, and by the increasing cost-effectiveness of satellite technologies
to rapidly deploy broadband services across wide geographic areas and to large
numbers of people within the satellite footprint. Our commercial networks segment
also leverages the deployment of our own proprietary high-capacity Ka-band satellites,
as well as Ka-band satellites operated or being built for third parties around
the world, by providing the ground infrastructure and user terminals that access
the satellites. The primary products, systems, solutions and services offered
by our commercial networks segment are comprised of:
Mobile Broadband Satellite Communication Systems. Our mobile satellite communication
systems and related products provide high-speed, cost-efficient broadband access
while on the move via small transceivers, and are designed for use in aircraft
and seagoing vessels. As of March 31, 2018, we expected to install IFC systems
on approximately 955 additional aircraft under our existing customer agreements
with commercial airlines, approximately 196 of which related to accepted purchase
orders (which are included in firm backlog in our commercial networks segment)
and approximately 759 of which related to anticipated purchase orders and requests
under existing customer agreements. There can be no assurance that all anticipated
purchase orders and requests will be placed.
Fixed Satellite Networks. We are a leading end-to-end network technology supplier
for the fixed satellite consumer and enterprise markets. Our next-generation
satellite network infrastructure and ground terminals are designed to access
Ka-band broadband services on high-capacity satellites. Our network systems
and modems enable satellite broadband access for residential or home office
customers. We also offer related products and services to enterprise customers
to address bandwidth constraints, latency and other issues.
Antenna Systems. We develop, design, produce, test and install ground terminals
and antennas for terrestrial and satellite applications, specializing in earth
imaging, remote sensing, mobile satellite communication, Ka-band earth stations
and other multi-band antennas.
Satellite Networking Development. We offer specialized design and technology
services covering all aspects of satellite communication system architecture
and technology, including the analysis, design, development and specification
of satellite and ground systems, fabless semiconductor design for Application-Specific
Integrated Circuit (ASIC) and Monolithic Microwave Integrated Circuit (MMIC)
chips, and network function virtualization, as well as a wide range of modules
and subsystems for various commercial, military and space uses, and radio frequency
and advanced microwave solutions. We also design and develop high-capacity Ka-band
satellites as part of our commercial networks segment (both for our own satellite
fleet and for third parties) and design, develop and produce the associated
satellite payload technologies.
Government Systems
Our government systems segment provides global mobile broadband services to
military and government users, and develops and produces network-centric Internet
Protocol (IP)-based fixed and mobile secure communications products and solutions
that are designed to enable the collection and dissemination of secure real-time
digital information between individuals on the tactical edge, command centers,
strategic communications nodes, ground and maritime platforms and airborne intelligence
and defense platforms. Customers of our government systems segment include the
U.S. Department of Defense (the DoD), allied foreign governments, allied armed
forces, public safety first-responders and remote government employees.
We believe growth in our government systems segment in the coming years will
be driven by continued growth in demand for secure, higher-capacity, higher-quality
broadband services, associated ground systems and advanced cybersecurity protections.
This continued demand reflects the U.S. military’s emphasis on “network-centric”
highly mobile warfare over geographically dispersed areas (which requires the
development and deployment of secure, IP-based communications networks, products
and service offerings capable of supporting real-time dissemination of data
using multiple transmission media) and increased use of IP-based network-centric
and bandwidth-intensive applications at all organizational levels. Satellite-based
systems are increasingly seen as the most reliable method of connecting rapidly
moving armed forces that may out-run the range of terrestrial line-of-sight
radio links. High-speed broadband beyond-line-of-sight connectivity is increasingly
required to support real-time command and control decision-making and enhanced
situational awareness.
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