As a company that competes against terrestrial providers such as DSL, cable and LTE, Viasat pushes the boundaries of the residential service that satellite can deliver, which in turn boosts our capabilities in the air.
Our competitors in the in-flight Wi-Fi space have struggled to meet their customers’ needs. That’s because they’re unable to provide enough capacity at low enough prices to meet the robust demand we see today and, more importantly, what we expect in the future. With passengers streaming video and often multi-tasking on more than one device, other in-flight Wi-Fi systems simply can’t keep up, resulting in poor performance as more and more people get online. Their solution is to charge high prices to passengers in the hope of keeping take rates low. Many of these providers tout their coverage, but what good is that when you can’t provide the capacity to match the service quality required by the passenger?
Our satellites are built to meet the ever-growing demand for bandwidth-intensive applications and high-definition entertainment streaming, both on the ground and at cruising altitude. There really isn’t a difference when you’re building a satellite for aviation versus residential use; what you’re doing is building a satellite to meet tomorrow’s demand for the internet, whether in the home or in the air.
A fully integrated network
As a full-service satellite provider, we design and build our satellites and ground network and user terminals as a system purpose-built for the delivery of internet. In contrast, most of our competitors lease satellite bandwidth from other providers on general-purpose satellites paired with other general-purpose ground systems. Unlike Viasat’s network, these are not optimized specifically for internet delivery, resulting in sub-optimal results. The net effect tends to be slow speeds at high price points.
Imagine a satellite’s capacity as a highway. Our satellites are 10-lane super highways capable of transporting today’s (and tomorrow’s) data-rich internet experience, while our competitors are single-lane country roads.
We can also reallocate our bandwidth to where it’s needed most. For example, we can devote more bandwidth to airport hubs and busy flight routes. Conversely, when fewer planes are flying and there is extra bandwidth available, we can optimize our bandwidth allocation by shifting to other areas. With all this flexibility, we can do all that with no loss of service quality anywhere else in the network.
Viasat builds its satellites and networks to compete in the terrestrial residential market with cable companies. The technological innovation and economics required to compete in this space translates directly to our ever-improving service offering to airline customers.
Enough capacity for all
In the aviation space, capacity can be a guessing game for our competition. They lease bandwidth based on what they think they’ll need to provide for their airline customers. This causes two problems. First, when bandwidth demand exceeds supply, it creates a bad customer experience and more bandwidth has to be leased (if it’s even available). Second, when that additional bandwidth is acquired, passengers aren’t paying any extra for it, so the level of profitability (if any) plummets. That’s a disincentive for those in-flight providers to improve service.
At Viasat, our business model of sharing resources across multiple vertical businesses gives us a distinct advantage in serving ever-shifting demands. Other providers can find themselves at the mercy of a fixed agreement that offers little flexibility when conditions change. Our customers benefit by having a network that’s completely controlled by Viasat, so we can make adjustments on the fly to deliver the bandwidth where and when it’s needed.
Viasat was at the forefront of being able to offer enough capacity for internet video streaming on aircraft. Airlines looking to improve passenger experience immediately saw the value here and jumped on board. JetBlue kicked things off with Viasat service by offering Amazon Prime streaming for their passengers, and Virgin America followed with streaming Netflix. Soon, other providers found themselves trying to catch up with what we were already offering.
They also assumed airlines would never want to offer Wi-Fi to their passengers for free, but now we see take rates of over 100 percent with JetBlue, which offers just that.
A changing landscape
Most other in-flight internet providers don’t have to worry about competing in the residential space, and the service they offer reflects that. Until recently, that worked just fine for them since no one in the air was offering anything close to what people were used to on the ground. Viasat has disrupted this model, and the rapid adoption of our service by airlines around the world is testament to the value placed on allowing the passengers to use their devices in the air the way they would on the ground. We like to think of it as “Life, uninterrupted,” where you can stay online for business or pleasure in the air with a similar experience to what you’re used to on the ground.
Airlines, along with their passengers and crews, will continue to benefit in the near future as Viasat adds satellites with even greater capacity and geographic coverage.
From a business perspective, there’s one other important thing to understand about how we view the economics of all this. Regardless of the technology you’re using to provide in-flight connectivity, if that’s all you’re doing with it, it’s likely there is wasted bandwidth. That’s because airplanes do not require maximum coverage every hour of every day. This drives up costs.
For Viasat, the tremendous capacity we have on our satellites means we can serve all of our airline customers as well as our other customers, be they residential, business or government. All customers are driving more demand, and thus spurring the development of an even stronger network. Our forward-thinking deployment plans for new satellites will have their needs met for many years to come.
When we first entered the aviation market, we knew we had to prove ourselves in a competitive environment. Our philosophy all along was to start with a small number of airline customers and build our reputation based on providing a truly at-home internet experience for everyone on the plane.
Now, of course, the word is out that Viasat has the best Wi-Fi in the sky. As you fly over all those homes below with our service, give a wave of thanks. After all, they make a lot of what we can offer in the air possible.