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ViaSat Chooses SpaceX for Its Satellite Launch

The first step into orbit is finding someone to take you there. ViaSat Inc. has chosen Elon Musk’s SpaceX to put its ViaSat-2 satellite into orbit in 2016.

Terms of the deal were not announced, though SpaceX says on its website that a launch using its Falcon Heavy rocket costs $85 million.

ViaSat-2 is key to Carlsbad-based ViaSat’s plan to offer speedier Internet connections via satellite and to grow its business among customers seeking ever greater Internet bandwidth. The Carlsbad-based company has a growing commercial business — it recently gained 16,000 net consumer subscriptions for 657,000 in total — balanced with its military and government business.

Since mid-2014, ViaSat has grown its local head count from 1,709 to about 1,800 people, and it’s hiring now. The company’s total head count is 3,000. ViaSat grew revenue 21 percent between fiscal 2013 and 2014 while shrinking its net loss. Its 2015 fiscal year will end around the end of March.

ViaSat’s other choices to put the large satellite into orbit would have probably been Arianespace of France, as well as International Launch Services of Virginia and Sea Launch AG of Switzerland, according to Andrew Spinola, an analyst with Wells Fargo Securities LLC in New York. Space Exploration Technologies Corp., or SpaceX, is based in the Los Angeles area.

Mark Dankberg, ViaSat’s chairman and CEO, said choosing a vendor to launch a satellite is “like everything else.” The company weighed capability, performance, economics and future technology, “wrapped it all together” and went with SpaceX. The CEO praised SpaceX for its innovation, noting the company is “always rethinking everything.”

Musk, SpaceX’s CEO, is also CEO of Tesla Motors Inc., the electric automobile manufacturer from Silicon Valley.

2016 Launch

SpaceX plans to launch ViaSat-2 in the late summer of 2016 from Florida’s Kennedy Space Center. Dankberg said it will be the fourth launch for the Falcon Heavy rocket, whose first stage consists of three Falcon 9 engine cores. SpaceX bills Falcon Heavy as the world’s most powerful rocket, with an ability to put 53 metric tons into orbit. SpaceX marketing materials give the $85 million price for a launch taking a payload to geosynchronous transfer orbit. In geosynchronous orbit, a satellite moves at the same rate as the Earth turns so it hovers over the same spot.

Meanwhile, subsystems of ViaSat-2 such as payload, propulsion, solar panels and power are coming together at Boeing Co. (NYSE: BA) in El Segundo. They are scheduled to be integrated during the summer, Dankberg said.

The CEO said that ViaSat-2 will likely not be the company’s final satellite, but he didn’t elaborate.

Andrew DeGasperi, an analyst with Macquarie Capital USA Inc., sees international potential.

“ViaSat may potentially launch additional satellites over several regions where demand for broadband is outpacing wireline infrastructure investments like E. Europe, Asia and LatAm,” DeGasperi wrote in a December research note. “Management is likely to replicate the ViaSat-1 business model and pursue residential satellite broadband, in-flight WiFi and defense applications.”

International Opportunity

The Carlsbad company said ViaSat-2 will be the world’s highest-capacity satellite at the time of its launch. Dankberg said ViaSat-2 will give the company a chance to spread its business internationally, since it is expected to cover the North Atlantic (where it can provide in-flight Internet), Mexico, Central America, the Caribbean and a small piece of South America. The satellite is expected to cover seven times the area as ViaSat-1.

DeGasperi added that ViaSat may have opportunities helping companies explore for oil in the Gulf of Mexico.

In an interview early last week, ViaSat CEO Dankberg said he planned to attend the 2015 International CES in Las Vegas, and was particularly interested in seeing connected cars.

Connected cars and aircraft will be “a great opportunity” for satellite service providers, he said.

VIASAT INC.

CEO: Mark Dankberg

Revenue: $1.35 billion in fiscal 2014;

$1.12 billion in fiscal 2013

Net loss: $9.45 million in fiscal 2014;

$41.2 million in fiscal 2013

No. of local employees: 1,800

Headquarters: Carlsbad

Year founded: 1986

Stock symbol and exchange: VSAT on Nasdaq

Company description: Provider of digital satellite communication services and wireless equipment

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