Viasat Earnings Conference Call set

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May 24th, 5PM EDT
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Michael McDowell

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Posted 4 weeks ago

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Stephen Rice

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I might actually listen to this call just for the entertainment. I have a bad feel stock prices are about to drop.
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Tres Bien

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"Welcome, everyone.  Let's begin with the good news, break for lunch, and then finish up with the bad news.  Well, see you after lunch."
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Stephen Rice

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I've got my popcorn ready.
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Michael McDowell

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Post a synopsis for us. I'm going to go take a nap!
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Nathan Hart

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Anyone care to set a wager? LOL
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Stephen Rice

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VSAT closed at $61.73 today. This call isn't going to be a happy one.

The last earnings call basically said there were some antenna issues but it wouldn't affect the company. Unlimited plans were announced as the standard going forward.

Today there aren't nearly as many unlimited plans available as Viasat hoped for, quality of service on Viasat 2 is hit or miss, plus there is an insurance claim that the lawyers don't want us to talk about.

It's really a shame because Viasat is a great company. Hopefully the government and commercial contracts aren't affected like us residential people are.

Regardless, I don't think it's going to be a very good earnings call. Stock is probably going to dip below $60 a share in the morning.
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Old Labs

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Raw numbers...

http://investors.viasat.com/news-releases/news-release-details/viasat-announces-fourth-quarter-and-f...

Slide presentation:

http://investors.viasat.com/static-files/cf361714-5558-47c5-9e11-ff364f5269bc

I'll wait for the transcript to be published at Seeking Alpha - it'll probably be available before the end of the buffering ;)
(Edited)
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VeteranSatUser, Champion

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All you need to listen to is the Q & A portion. That is the non scripted part where info can be gleaned sometimes.
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Stephen Rice

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Great news!  98 percent of the beams are turned on!  Moments before that, it was said that the spot beams aren't operational and the augmented beam is in operation.  Confusing, eh?
(Edited)
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Aaron Anderson

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High Density Spot Beams seem to work in Central Florida.  Platinum 100MBps available for $150 3 months and then $200.
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Old Labs

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Apparently you have to buy the plan to find out what's in it... but based on another source I'm guessing that Viasat-2 is only unlimited plans at this time, while availability if any on Viasat-1 is limited to Liberty Plans. Just a WAG and some are wilder than others...
(Edited)
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fmj77

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I can get the same plans as Gabe now and Liberty plans are no longer available to me. These are nothing but fake "unlimited" plans and not worth the price. No thanks. I ain't giving up my Freedom.
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fmj77

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I can get the same plans as Gabe now and Liberty plans are no longer available to me. These are nothing but fake "unlimited" plans and not worth the price. No thanks. I ain't giving up my Freedom.
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VeteranSatUser, Champion

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Actually, you have to wait until the installer shows up to find what you get.

I have been a proponent of Viasat, but this plan rollercoaster is pretty ridiculous. They change plan options like the weather. If you don't like what is offered, wait 15 minutes and it will change. No consistency, and makes no sense to the end user.

Andy, as a Viasat installer that has to satisfy customers, you have my sympathy.
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Michael McDowell

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So.... What did we learn today?
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Stephen Rice

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From what I could understand, the antennas that aren't operating were supposed to provide signal for the spot beams. Those spot beams aren't operational because of the two antenna failures.


Moments later it was announced that 98 or 99 percent of the spot beams are activated. Maybe I understood it wrong, but it sounded pretty contradictory.


There was a big emphasis on revenue from airlines. I'm guessing those technologies don't rely on spot beams to work as designed.
(Edited)
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Michael McDowell

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Sounds like you are saying that not much info came out about the actual technical problems or anything about the insurance claim?
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VeteranSatUser, Champion

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Read my post above. What we learned was Viasat-2, as it was operationally designed, is a failure.

http://www.sandiegouniontribune.com/b...
(Edited)
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fmj77

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That article doesn't make it sound like a failure at all and doesn't mention how most of the country still can't get on the best plans.
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VeteranSatUser, Champion

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"Results of those sales efforts haven’t materialized at this point. Viasat’s residential subscriber base was flat at 576,000 customers for the quarter"

Let's see. Given the plan design and pricing offered for Viasat-2 across a lot of the country, how exactly do they plan on increasing the subscriber base?
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Bev, Champion

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Well, by being slightly less than DirecTV and, calling the plans Unlimited, then convincing people that low res video is fine for them.

Yes, that works for my step son, biggest screen is a 19 inch TV and, he works long hours so, streams 1-2 hours each evening and, that usually on his phone, the TV is for a weekend movie. Bronze works for him.

I don't stream on my TV, I download for that or watch live and, 480 is fine for youtube and Twitch so, Silver works for me.

Where the new sales are going to come is if people get jobs or better paying ones and, can then afford internet in the sticks. In areas like mine, any internet is better than none and, satellite is the only option. Viasat still beats Hughes unless you're a die hard night own, then it's about equal.

They certainly can't expect a family making only 35,000 a year to fork out even 1200 of that for internet but, if that family makes 40,000 then they might do it. (35 is the average in my area.)
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Andy Schack, Champion

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My sales are down well over 50%.....I call that a failure.

Andy
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VeteranSatUser, Champion

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I had posted this a few weeks ago. I feel sorry for the dealers especially. You of all people know what the plan was.
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fmj77

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Definitely not good for you Andy. I'd say Viasat 2 is shaping up to be a partial or total disaster for almost everyone involved.
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Michael McDowell

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Here is a link to the transcript of the Earnings Call.  Most of the interesting stuff starts about page 10 or 11 in the questions. According to this, everything is "Rosey", just a few minor glitches and adjustments to be made!

https://seekingalpha.com/article/4177027-viasat-inc-vsat-ceo-mark-dankberg-q4-2018-results-earnings-...
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Stephen Rice

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I can't believe it.  Stock is at $67 a share right now.  Thats more than an 8 percent increase since yesterday's close.

Good for Viasat and it's investors.
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Aaron Anderson

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Thank you for the earnings transcript.  I thought it was very interesting when they compared the viasat 2 performance to viasat 1.  viasat 1 had an expected 100GBps bandwidth but ultimately had a maximum bandwidth of 140GBps.  The same may be true with viasat 2.  They put out the 300GBps number as a "base case" to Wall Street, probably using a probabilistic model assuming a possibility of glitches like what occured.   If everything goes perfectly, the real maximum bandwidth of ViaSat 2 is 400GBps and Wall Street loves the surprise..........which makes the 260GBps current bandwidth possibly a much bigger setback then let on and could better explain why all the plans have been altered so significantly.
It looks like the problems are in the high density spot beams supplying the bandwidth to the expected 50MBs and 100MBs plans.  Ultimately, most of the country may be lucky to have performance that meets Hughesnet's 25MBps plans.  I guess Hughesnet must be loving the ViaSat 2 failure.  From what I can tell, very few customers are switching and they've had a year to scoop up customers in all the underserved locations while Viasat 2 withered on the vine.
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Michael McDowell

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They claim over 10,.000 new subs on Viasat-2.
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Andy Schack, Champion

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I'm sure that a decent % of these new subs are people in the Small beam areas whose addresses have been black-listed by the cable companies due to repeated non-payment and disconnects. They get a flyer from Viasat and say "hey kids, were get'in internet again". I predict the churn rate is going to be through the roof. 

You've got good, solid sales and then you have just sales. There are a lot of "just sales" going on right now. 

Andy
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Old Labs

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It was tens of thousands of subscribers as I read it - not necessarily new subscribers. Balance it against the fact (also reported yesterday) that overall subscriber count was down slightly at 576000 vs. 577000 three months ago - we don't know the mix of new vs. existing subscribers on Viasat-2 but the bleeding has slowed at least.     
(Edited)
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VeteranSatUser, Champion

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Nothing like was anticipated. The high density spot beams were going to be the real "cash cow" for Viasat-2 to pull customers from bad DSL and Hughesnet. Without them, they are not going to grow their customer base like they had hoped.

IF they want to get people on 2, offer Freedom 150 nationwide for $99.
(Edited)
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elchicano65 .

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I went quickly through the Q & A transcript and it reveals pretty much what i had stated months ago. Their main focus is DoD and other gov't entities, commercial and airline connectivity with their large contractual commitments. They seem to be trained on continued growth in Asia/Pacific, the Middle East and the airlines. Viasat-3 will allow for this continued expansion into new world markets and not so much for the US residential subscriber. Resolving the antenna issue will sort of take care of itself, they presume, while they continue growth plans.
All well and good for them. I have no great expectations from Viasat as the plan I have is ok @ 10Gb/month and 12 mb downloads. The one saving grace is that I still have unlimilted access until 8 am. Our electric co-op has been building out the fiber optic network in our county and is just across the interstate from my home. I am patient and always subscribe to the belief, "things gotta way of workin' out".....
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Stephen Rice

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And just like that, the hype is over and the stock price is back to normal. It's currently trading at less than $63 a share.
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Oliver

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Still happy I sold and took a little loss. Viasat is being way to up beat about making a $300mil insurance claim and everything OK. The 98% covrage with the wide beams does not jive with what we see on offer.
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Stephen Rice

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Amen. I took a small loss and don't regret selling.
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I read an article about Viasat being one of the few space companies you can actually invest in.

Risky business. Even riskier is the insurance companies that cover the space projects. The claim on the first space shuttle did a lot of financial damage. A potential claim we shall not mention or speak of could have similar consequences.
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Aaron Anderson

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I read the Echostar (Hughesnet) earnings call. It's very interesting how Hughesnet is growing their business at a very aggressive rate while Viasat whithers on the vine with decreasing subscribers.  Perhaps the plan is to let Hughesnet scoop up all the customers until their Gen5 is at capacity and they shut down beams so ViaSat becomes the only option?
It's very interesting how Hughesnet has supposedly less bandwidth yet they somehow have double the customers ViaSat has and is experiencing accelerated growth.


https://seekingalpha.com/article/4172607-echostars-sats-ceo-michael-dugan-q1-2018-results-earnings-c...

As mentioned earlier, our total consumer base of retail, wholesale and SME subs was approximately 1.267 million as of March 31, 2018 compared to 1,043,000 as of March 31, 2017. We had net adds of approximately 59,000 subs in Q1 compared to approximately 7,500 net adds in the same quarter last year. These metrics do not include subscribers that are partners, Xplornet in Canada and StarGroup in Mexico, provide service through since these are capacity sales, but they do add to our revenue and earnings.
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Well... Viasat would say they stress quality over quantity. They sell plans for north of $150 And $200. Does Hughesnet even have that expensive of plans? Don't get me wrong, I think Viasat is pricing themselves out of the market, but their focus the last several months is to get more $$$$ from existing customers than to attract new customers.
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Aaron Anderson

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On the Echostar earnings call, they say they are experiencing decreased churn on their plans which are unlimited like Viasat.  Their top Gen5 plan is  $129.99 25mbps with 100GB cap 50GB/50GB split between normal hours and their 2AM-8AM overnight zone.  FAP is said to be 1-3mbps.
That is better than what viasat 2 can provide in most of the country right now, no?
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VeteranSatUser, Champion

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In terms of top speed, yes. But I wouldn't use the words "unlimited plans" to describe either provider.
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Ricky Dean

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Well,  I am one of the Suckers out there..  I jumped on Viasat before V2 was ready, with the wing and a prayer..

To this day..  I have no, none, nada access to Viasat 2.. I have a very High Bill until my contract it up and still going on three months, I still cannot get the resolution promised for Netflix.. 

I try to stay positive, but over all Viasat has ultimately failed me with what has been been promised, and failing even more for what I am paying for to be delivered..

It is only made worse by all the stuff they keep boosting and proudly posting to the public about their company..  Truly I want to believe them, and I would love to be Proud of been a Viasat Customer..  but sadly I do not feel Viasat is to proud to have me as a customer.


FYI,, David on their team is still Awesome..
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Thanks for the update Ricky. I had wondered how you were getting along.

Just remember. There is what is said in a corporate earnings call and then there is reality.
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Judge and Jury

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We are committed to serving the best interests of our shareholders.

http://investors.viasat.com/investor-relations

The residential section is treated worse than a step-child, more like a foster-care kid.

The bandwidth needed to fulfill a firm delivery contract is always taken from the "wasted" bandwidth used by the residential customers.  It's seen as wasted because they are under no obligation to deliver to us.  We, the residential customers, are the users of un-allocated bandwidth not yet reserved by a firm delivery contract.  We are where ViaSat trims the resources to deliver to them that will get  their purchased speed.  

ViaSat can't leave well enough alone and say to themselves "we have sold out on bandwidth, if we sell any more, residential will not just be deprived, they will actually suffer."  Instead they just say "we'll get it from squeezing residential a bit more" and here is where we are today.  We pay a firm price but get the scraps that fall to the floor not yet scooped up for a new member at the table.  The more eating at the table means the less scraps for us on the floor.  We have no priority, we don't eat at the table.  We are what the higher-ups of the "New World Order" call the "Great Un-washed" and they don't care if we live or die and actually prefer us to be dead. ViaSat has aligned themselves with that same thinking when they consider the residential customers.  We are told there is congestion and that is making our speed barely able to sustain a connection. What’s really going on is the pigs at the table are consuming everything.
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Judge and Jury

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The ViaSat load forecasters see VS2 being filled with contracts.  They must discourage residential from going there to keep the resources available in the future for the firm contracts (pigs at the table).  We are a nuisance to them, we are bottom-feeders.
 
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Nathan Hart

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So will we ever get a complete and honest explaination about what exactly happened to VS2? Or is an “on orbit antenna issue that won’t effect anything “ be all we will ever hear? On another note investment firms warned that Viasat was a bad investment stating that everyone who wants satellite internet already had satellite internet and that the residential market is completely saturated. Is this why new subscribers aren’t materializing?
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Bradley

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Fair enough.
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Andy Schack, Champion

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J&J absolutely nailed it and said many things that I would probably get a "don't say that anymore" email for saying. 

Andy
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VeteranSatUser, Champion

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Glad you do post Andy. The old forum had a dealer from Tennessee who always was knowledgeable and shared advice. Alas, he refused to join this site.
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Old Labs

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JimCoe? He was here but haven't seen him in a while... probably gave up after one exchange I recall in particular where he offered some help and was then immediately slammed by the individual idiot requesting the help - a lot of helpful members have left for that very reason.  
(Edited)
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VeteranSatUser, Champion

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Yea. That was his name! Good guy.
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fmj77

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Why in the hell is my current Freedom plan, which is on VS1, better than anything being offered on VS2? That's what I can't figure out. 
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Nathan Hart

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Don’t forget they initially implied VS2 would be just about all freedom plans.
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Stephen Rice

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And just like that, Viasat 2 is available in my area including the Platinum plan for $200 a month.
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Andy Schack, Champion

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True. The Large Beams have very little capacity set aside for customers living in those areas. Had customers calling yesterday complaining that Netflix wouldn't ever load. Had my Wife try it here at the house and she said it took forever to load and even then the pq was terrible. Was told they would get on it after the holiday. I was ticked to say the least. So I told the customers the same thing I was told. I don't even try to "cover" for these companies anymore...Dish, DTV, etc. Customers will come in the store and say something like "XXXX company sucks!" To which I say "you think they suck for YOU being a customer.....you should try being a dealer for them". I usually am met with a blank stare.....people aren't used to hearing the truth. 

The whole problem in my humble opinion is that the ones who set policy and implement decisions don't have to face the actual customer. I do. Anytime I've had one of my reps say "just say this or that" I respond that they are MORE than welcome to work here at my store for a week and do it themselves....never have had a taker. 

Andy
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VeteranSatUser, Champion

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Sounds like you got a lot of challenges ahead of you as a dealer.

It has to be incredibly frustrating to want to provide customer satisfaction but to be at the mercy of others that have to support you.
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Andy Schack, Champion

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You can say that again.....and the way my post are being double-posted....I probably will. 

Andy
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fmj77

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Considering that Viasat can't fix the problems with this crappy forum, I wouldn't expect them to fix anything with their degrading service. At the very least, they should bring back the old Wildblueworld forum, which was much more user friendly and much easier to navigate.
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VeteranSatUser, Champion

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And they had an ignore button, for people like that spammer yesterday.

Maybe Viasat will just sell their residential subs to Hughesnet and focus on military and commercial customers in the air. I cpuld see that happening given their stagnant customer base, losing the Eutelsat deal, and Viasst-2 not going to reach its potential.