PARIS — Broadband hardware and service provider ViaSat Inc., in a transaction that smoothes the company’s tricky entry into the European market, has entered into a cost-sharing program with the European Space Agency (ESA) to develop broadband satellite user terminals and gateway Earth stations for the ViaSat-3 network.
The Public-Private Partnership (PPP), which is an increasingly common structure used by ESA, will leverage ViaSat’s existing Swiss operation and feature an initial investment of 31.2 million euros, ($36.2 million), to be co-funded by both parties.
The transaction is one of several ways ViaSat is seeking to overcome resistance to its European satellite broadband plans. The company is also exploring a deal involving satellite builder Airbus Defense and Space under which Airbus — not Boeing Satellite Systems International— would build the third ViaSat-3 satellite, which has yet to be contracted, industry officials said.
Depending on the construction schedule, an Airbus-built ViaSat-3 could be the second one launched, and would operate over Europe. That would leave a third satellite, with a platform provided by Boeing, to cover the even-more-complicated Asia-Pacific market ViaSat needs to offer a global solution.
ViaSat is designing the three-satellite ViaSat-3 network of terabit-per-second-throughput broadband satellites to extend its current North American business into Europe.
An industrial-policy nudge for the ViaSat-Eutelsat ViaSat-3 partnership
The company has entered into a joint venture with satellite fleet operator Eutelsat of Paris to market consumer satellite broadband in Europe and are negotiating a companion agreement under which they would divide the cost of a ViaSat-3 over Europe.
Some European industry officials have opposed the latter transaction, arguing that Eutelsat and European governments should build their own, made-in-Europe network.
But the private sector in Europe has been reluctant to take the leap in consumer broadband, and Eutelsat’s agreement to sell a majority stake of its retail consumer broadband services to ViaSat is testimony to that.
Europe’s other major satellite operator, SES of Luxembourg, has a consumer satellite broadband business but has always viewed it as temporary operation that would be overrun by terrestrial broadband.
Meanwhile ViaSat has committed to investing more than $1 billion in ViaSat-3, the first two of which are under construction. Boeing Satellite Systems International is building the two ViaSat-3 payloads, and ViaSat — for the first time — is handling the payload production itself.
Switzerland, Netherlands, Romania now in ViaSat’s corner
ViaSat’s ESA PPP, called Project Aidan, is intended to be funded at 68 million euros. The 31.2-million-euro first tranche is being financed through ESA by the Swiss, Dutch and Romanian governments, whose domestic industries will reap the corresponding contract awards.
ViaSat said the user terminals to be developed will be “fully electronic phased array” units for residential subscribers, in-flight connectivity and connected-car applications.
The ESA investment is managed by the agency’s Telecommunications and Integrated Applications Directorate.
Magali Vaissiere, the directorate’s chief, said the ViaSat PPP “will being ESA and industry together to quickly develop broadband products that will serve the needs of millions of consumers across Europe who are currently without adequate internet service.
“We believe this is a significant industrial opportunity that will help keep Europe and the forefront of satellite and broadband technology development, giving Europe a leading position on the deployment of a next-generation broadband system.”
The prospect of a ViaSat-built terabit-per-second satellite serving European consumers equipped with ViaSat-built user terminals and linked via a ViaSat-built network of terrestrial gateways has been a scenario that has been waived in front of European governments and Eutelsat.
The ESA-ViaSat PPP suggests that European industry may have a larger-than-expected role in the system.
In a Nov. 6 statement, ViaSat said Project Aidan products are expected to be available in 2019 “to enable testing of all equipment with the ViaSat-3 constellation.”
ViaSat Chief Executive Mark D. Dankberg said the company has been growing its presence in Europe, in Lausanne, Switzerland-based ViaSat Antenna Systems S.A. and elsewhere. “We are proud to tap into the space interests of ESA, the member states and European industry,” Dankberg said.