ViaSat to Launch Excede Broadband Service Advertising Campaign in Q4

The campaign, which includes print and TV ads, follows ViaSat’s having gained 20,000 net subscribers in Q2 for its broadband services, which include Excede and WildBlue, company officials said. Excede, which launched earlier this year, had 66,000 installs in Q2 to a service that promises maximum 12 Mbps/3 Mbps download/upload speeds. ViaSat ended Q2 with 405,000 subscribers to Excede and WildBlue, down from 425,000 earlier this year (CED Jan 12 p1). Average revenue per user improved 3.5 percent to $45.46, drive largely by Excede, company officials said.

The marketing campaign follows ViaSat parting ways with its largest third-party company providing call center and Web services. ViaSat switched July 1 to Xerox’s Affiliated Computer Systems (ACS), gaining a dedicated group within ACS to handle its call center and taking a larger role in staff training and paid search, Scalpone said. While there was a “little bit of roughness” in shifting to ACS from the previous vendor, ViaSat needed to make the change, Scalpone said. About 40 percent of ViaSat’s new subscribers are gained from another terrestrial broadband service, up from 30 percent in Q1, company officials said.

"When you are in maintenance mode and don’t have a ton of capacity, it’s OK” that ViaSat relied heavily on a third-party provider for call center and Web services prior to Excede’s launch, Scalpone said. “But when we have a new service to launch, we need to have control ourselves. How do analyze customers coming in it you aren’t taking the calls? We now control the training, curriculum, how the calls are routed and see all the analytics."

Excede’s subscribers are getting the service through the ViaSat-1 satellite at 115 degrees west that launched last October to deliver the service along the east and west coasts as well as Alaska and Hawaii. There were 100,000 subscribers on ViaSat-1 at the end of Q2 in June, including those for Excede, JetBlue’s LiveTV and XploreNet in Canada. WildBlue subscribers are getting a service with a maximum 1.5 Gbps download speed from Telesat Canada’s Anik F2 satellite at 111.1 degrees west as well as transponders aboard SES Americom’s AMC-15 that are leased to EchoStar, Scalpone said. In Q2, about 20,000 WildBlue subscribers upgraded to Excede, ViaSat CEO Mark Dankberg said on an earnings call. But at the same time, ViaSat is making some speed improvements to WildBlue to keep those customers that don’t switch to Excede, Scalpone said.

"Some people don’t want the hassle of switching services and they are OK with 1.5 Mbps,” Scalpone said. “We want to make sure we capture those customers that do not want to migrate” to Excede. “For those that don’t, we want to make the WildBlue service even better."

ViaSat also expects Dish Network to remain a key reseller of its service, despite the satellite operator’s expected plans to add Excede rival HughesNet to its portfolio of services. HughesNet is expected to launch its own higher-speed service in late September. HughesNet is owned by EchoStar, which spun off from Dish and supplies it with satellite receivers. HughesNet is using the EchoStar-17 satellite at 107.1 degrees west to deliver a service that claims download speeds up to 25 Mbps. Dish has accounted for more than 100,000 of WildBlue subscribers in the past.

Dish, which is selling Excede packaged with two programming bundles starting at $79 with the Family Pack, initially told ViaSat in February 2011 it wouldn’t renew the resale agreement that was scheduled to expire in August 2011. ViaSat can continue providing WildBlue at the existing price until there are fewer than 20,000 Dish-related customers, ViaSat has said in SEC documents. In addition to Dish, Excede is available through about 1,500 TVRO dealers, Scalpone said.

Satellite-based high-speed broadband is “going to be big focus” for Dish owing to its ties to EchoStar and relationship with ViaSat, Scalpone said. “Is the market big enough that Dish can sell both of us successfully?” Scalpone asked. “I think the answer is ‘yes.'” But Dish “over time will have a greater affinity” for HughesNet service and “that will probably be the case,” Dankberg said. “But I don’t think the Dish won’t want to use our satellite. That is not the indication they have given us.” Dish officials weren’t available for comment.

ViaSat’s Excede so far has found a data package carrying a $49.99 monthly fee and 7.5 GB cap on a two-year contract to be the most popular, trailed by those offering 15 GB ($79.99) and 25 GB ($129.99), Scalpone said. About 80 percent of sales are for the $49 plan, Dankberg said. ViaSat began enforcing data caps in July and will offer options for those subscribers that exceed them, Dankberg said. ViaSat also introduced a program in mid-August giving subscribers access to Excede from midnight to 5 a.m. with having it count against monthly data usage, Scalpone said.

"Our objective is not to make money on buy more” data options, Dankberg said. “Our objective is to have customers buy the plan that is right for them."

ViaSat slashed the Excede installation price to $49 June 1 to match those found with other broadband services. And it simplified installation, adding “self-pointing” tools to align the dish with the satellite and enabling an install to be complete in two hours, Scalpone said. ViaSat is targeting 30,000 to 40,000 Excede installs per month, but won’t hit that in Q3, company officials said. Migrations from WildBlue to Excede are expected to be about 30 percent of installations in Q3, company officials said. Excede is available along the east and west coasts as well as Alaska and Hawaii using a network of 17 gateways and has uplink facilities in Denver and Winnipeg, Canada, the company has said.

To further expand Excede’s offerings, ViaSat plans to introduce VoIP in the 4th quarter. ViaSat is expected to field a ViaSat-2 satellite, but “we don’t have a contract in front of us that we are ready to execute,” Dankberg said. While ViaSat was expected to have a contract for ViaSat-2 in July, the company has “opened the aperture” in terms of options being considering and “we are hoping we can announce something” in Q3, Dankberg said. The ViaSat-2 negotiations are largely about “price and terms,” he said. While ViaSat-2 will used for commercial business, much of its capacity will be focused on the consumer market, Dankberg said.