Starlink SpaceX is coming ... are HughesNet and Viasat still competitive?

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In an era with LEO Starlink, will HughesNet and Viasat still be competitive?

Logically, some percentage of customers will switch to a new provider, if the service is faster as projected and the price is at least the same or lower. 

What percentage of customers do you think will switch based on your satisfaction with Viasat? 

If 20% of the customer base migrates to Starlink, will HughesNet and Viasat still be viable companies financially? They seem moderately profitable now, but they both have huge debt (building Viasat next 3 satellites) that is rated junk high yield risk.

I am a Viasat customer in a long term contract for another 18 months and I am regretting it now based on what I am reading about Starlink. I sort of wonder whether this company can survive long term with OneWeb and Starlink coming.
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Jay

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Posted 1 month ago

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Voyager

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You have nothing to worry about in the next 18 months.
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ExSatUser

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Being that none of this tech is even operational yet, awfully of speculation going on.

Come back in 3 years and let's see where things stand.
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Jay

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I think it is a lot sooner than 3 years. More likely the 3rd and 4th quarter of 2020 we will see major movement of customers. 
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ExSatUser

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LOL
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Jay

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Why the LOL? 

Starlink is funded by Google, Fidelity and Elon Musk. They turn down new investment money because they don't need it.

OneWeb is funded by SoftBank.

ViaSat has less than $50 million in the bank.
ViaSat has $2 billion in junk debt that is rated 5 notches below investment grade. ViaSat is cash flow negative building 3 more GEO satellites that will all have equally lousy latency as the current GEO satellites. 

ViaSat is basically living on a $600 million line of credit right now while they are building 3 expensive satellites that are already obsolete compared to what OneWeb and Starlink are launching.

I have a hard time seeing a happy ending here. Any other LOLs?
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Admiral Korbohuta

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Jay, I think ExSat is correct to be a bit skeptical about Starlink. At this point we know very little about pricing, how the service will work or even the hardware involved for residential customers. It could end up failing miserably or end up being the next evolution of satellite internet.
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GabeU, Champion

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I doubt HughesNet's debt is as big as you think it is.  They're also invested in OneWeb, building at least a part of their ground based infrastructure.  As of right now they have 1.4 million plus subscribers.  

But, LEO will no doubt hurt them.  
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Admiral Korbohuta

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Viasat is partnering with SpaceX in some regard. Can't remember if it's with development of rockets or something else.
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Oliver

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Viasat is NOT a partner with SpaceX. Viasat paid for a launch on a SpaceX rocket.
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Jay

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HughesNet has $2 billion in debt, also junk rated, but they have the cushion of also having $2.5 billion in cash in the bank.

Viasat has $1.9 billion in debt, junk rated, with less than $50 million in the bank. I read the transcript from the last earning conference call. Viasat is currently burning thru cash to build 3 new satellites and launch them in the 2021-2022 time frame. Viasat keeps the lights on due to a $600 million line of credit right now, trying to make it till their new satellites get to orbit and produce revenue.

Looking at all of that, it naturally causes me to ask the question ... what happens this summer when Starlink starts pre-sales for their constellation? 
Not many companies, in Viasat’s precarious state, could survive losing 20% of their customer base.
(Edited)
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ExSatUser

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I agree. Look who he married!
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Jay

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Which one? Talulah Riley is hot. He married her twice.

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ExSatUser

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Yep her.

Not to mention running around with Depp's ex.
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Jay

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He is worth over $30 billion. I cannot believe the hag he is with now. Grimes is sort of nasty looking.
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ExSatUser

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And pregnant.
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ExSatUser

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So Jay, I know you are a proponent of LEO internet .


With Oneweb now bankrupt and Starlink bleeding cash and looking for more (I know you said they were turning it down a month ago), curious what your thoughts are now. Obviously doesn't look good right now.
(Edited)
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Jay

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SpaceX has launches on the manifest for NASA resupply to the ISS, NASA crew to ISS (starts in May) and for the US military. In addition, SpaceX has several NASA science launches on the manifest. 

The US Air Force is drooling over Starlink. They paid SpaceX $27 million just to help with testing the system and proved 610 mbps downloads to an Air Force plane in flight. Starlink is likely to get a $1 billion or larger contract for Starlink data connectivity to the US military. The Air Force wants Starlink connections on every drone they have.
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Old Labs

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Only if it's a Chick-fil-A franchise. Business was boomin' at the drive through yesterday. Carry out too.

Probably has something to do with their new marketing:

https://babylonbee.com/news/chick-fil-a-temporarily-changes-slogan-to-eat-fewer-bats
(Edited)
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Admiral Korbohuta

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The article is nothing more than a blog. Again, SpaceX itself is in no danger of going bankrupt. Starlink might however.

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ExSatUser

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SpaceX I agree.

GM us slashing salary pay by 20%.

Tesla isn't making or selling cars right now.

My company has stopped capital expansion right now.

Cash is king and now it is all about preserving it.
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Old Labs

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Maybe Starlink will have a conference of champions and we can get some reliable info.
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Bradley

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https://www.google.com/amp/s/arstechn...

And bankruptcy only means debtors can’t pursue you. Business as usual.
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Voyager

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Not quite business as usual, particularly when you are still running mostly on investment money rather than cash from actual operations. Once you screw over a large set of investors via bankruptcy, good luck finding the next round of investors.
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ExSatUser

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When you declare bankruptcy before you ever get a company started to generate income, that is not good.
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GabeU, Champion

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It's not too good for HughesNet, either, with them having been involved in building the ground based infrastructure.  I wonder how much of a loss they're going to take.  :( 
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Jay

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EchoStar HughesNet will probably lose their ownership stake in OneWeb. They owned something like 2% or 3%. Also, EchoStar HughesNet had a contract to resell OneWeb data plans to consumers, so that is worthless now.

OneWeb doesn't really have much to offer, so it will likely result in liquidation in bankruptcy court and the satellites in orbit will be de-orbited.
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Ian

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" EchoStar HughesNet had a contract to resell OneWeb data plans to consumers"

LOL! 
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Lighthope

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I'm really, really waiting for these Leos to come out (and work!).  Low latency, higher data limits.

Just wondering about the price.

ViaSat is in my area, but are wanting a laughable $200/month for a paltry 65gigs. I said no.

Hoping Starlink will do better.
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Homeskillet

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I don't understand the blind faith people have in Elon Musk. With Tesla he constantly over promises and under delivers. Pretty much 1/2 or more of the cars they have made have been recalled. The cars they produce crash at up to 50% more than similar models from other manufacturers. The company losses money at a ridiculous pace. Something tells me providing a low orbit satellite system coordinating hundreds of them will be a lot more of a challenge than building an electric car.
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Admiral Korbohuta

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SpaceX isn't going anywhere. NASA and various US and foreign armed forces will make sure of that.
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Ian

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Musk is divisive, reckless, conceited and bold. These are common characteristics of the most successful business people. I imagine he's kindof hard to get along with. The difference with Elon Musk is that he is also a brilliant engineer and a visionary. I wouldn't be surprised if he's on the spectrum.

He has proven time and time again that his team is capable of delivering astounding results. 200+ mile range on his first EV when other manufacturers were struggling to beat 100 miles. 300+ miles on current production EVs. 

Self-landing & modular/reusable space vehicles (with expected failures). Functioning LEO constellation. A digital payment system that revolutionized "instant money." Tunnel boring in LA with modular/flexible, "earthquake proof" reinforcement. 

I don't think he necessarily has "new ideas" as much as the vision and determination to deliver us to where we thought we'd be by now back in the 50's and 60's.
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Ian

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Musk is divisive, reckless, conceited and bold. These are common characteristics of the most successful business people. I imagine he's kindof hard to get along with. The difference with Elon Musk is that he is also a brilliant engineer and a visionary. I wouldn't be surprised if he's on the spectrum.

He has proven time and time again that his team is capable of delivering astounding results. 200+ mile range on his first EV when other manufacturers were struggling to beat 100 miles. 300+ miles on current production EVs. 

Self-landing & modular/reusable space vehicles (with expected failures). Functioning LEO constellation. A digital payment system that revolutionized "instant money." Tunnel boring in LA with modular/flexible, "earthquake proof" reinforcement. 

I don't think he necessarily has "new ideas" as much as the vision and determination to deliver us to where we thought we'd be by now back in the 50's and 60's.
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Ian

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Sorry for the double post, I didn't do that.
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Voyager

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@Ian. I would say that reckless is an over the top adjective and I am not sure about divisive either, but conceited and bold probably apply. There are very few truly new ideas in the world. It is surprising how many things have been tried before, but executing an idea successfully in a commercial sense is a big deal and Elon seems able to do that time and time again. There is much to be said for that no matter what you think of him personally.