ViaSat Launches Satellite Service to Rival Broadband
If you live in a rural area, then you know that it is virtually impossible to get decent Internet service. For years, the best non-urban dwellers could do was subscribe to satellite service, with all of its weather-related fussiness and sloggy, uneven download and upload speeds -- and pay top dollar, to boot. Now, all that is about to change.
ViaSat (NAS: VSAT) , the satellite and wireless communications company that bought Wildblue in 2009, has announced a new service that it claims rivals broadband. Exede, as the service is called, cost the company $400 million for the new satellite alone, as well as untold millions updating ground stations and laying fiber-optic cable. Wildblue customers (like me) have been hearing about this new service for some time now, so I was happy to delve right in and find out more about it.
In addition to Wildblue, DISHNetwork (NAS: DISH) is also offering the service, and the speeds are really impressive; the package delivers up to 12 Mbps for downloads and 3 Mbps for uploads. The fee schedule sounds much the same as the current Wildblue service, and $50 per month now buys 7.5 GB of data allowance, not a bad deal. To compare with current Wildblue speeds, $50 monthly might, on a good day, net you a speed somewhere around 500 Kbps, much the same as DISH. More expensive plans, which usually run around $110 to $120 each month, promise up to 2 Mbps.
Comparable speeds to DSL and cable
Of course, the crux of the matter is how well Exede stands up to DSL and cable, the two most common Internet services. Cable is superior to DSL, which delivers between 6 Mbps and 15 Mbps, depending upon the age and condition of the copper wiring. Verizon (NYS: VZ) , one of the two leaders in DSL Internet delivery services, offers a monthly package of 1.1 to 15 Mbps -- quite a spread -- for approximately $40. Where I live, at least, there has been much discussion regarding the age of the copper wiring, so I would be surprised if anything near those top speeds could be attained.
The fastest cable could conceivably achieve speeds of 30 Mbps, but in reality it's usually around 15 Mbps. Comcast's (NAS: CMCSA) homepage lists all the Internet options available, and offers a 105 Mbps package for about $200 per month, but its $50 monthly service delivers only 6 Mbps, much less than the 12 Mbps Exede offers for the same price. In a test performed by PCMag.com last year, Comcast delivered download speeds of almost 19 Mbps, considered very good.
This means that not only is Exede going to be gobbled up by the 15 million rural customers who are starved for high-speed Internet, but the new service can actually compete with DSL and cable. This is huge, and means that ViaSat, unlike satellite service providers in the past, will be able to move into more populated areas and offer a product that is comparable to what those customers already have available.
There are a couple of caveats, however. As with all satellite connections, there is the issue of latency. This annoying second-or-two lag for the sending and receiving of information still makes this type of connection suboptimal for gaming. Also, the 12 Mbps speed is available in most of the U.S. right now, except in the Rocky Mountain time zone, at least until the company launches another satellite to complete coverage. Meantime, Wildblue service upgrades will fill in the gap.
This new service is a winner
In addition to the foregoing, ViaSat is also working with JetBlue to develop broadband capabilities for commercial flights, and claims that its new service will enable the broadcast news media to do without satellite trucks when in the field.
ViaSat will begin installing customer systems starting next month, and I predict it will be a big hit. From what I have read, Exede really does deliver on its promises, and even claims to have improved the weather-interference problem. For a minimal start-up fee and comparable monthly costs, Exede sounds like the enhanced broadband experience that many Internet users are clamoring for.
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At the time this article was published Fool contributor Amanda Alix owns no shares in the companies mentioned above.Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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