ViaSat Inc. and Eutelsat Communications announced an agreement to create a joint venture combining Eutelsat's current European broadband business with ViaSat's industry-leading broadband technologies and consumer Internet Service Provider (ISP) business expertise.
Building on a decade-long relationship, ViaSat and Eutelsat are joining forces to create a partnership that will expand Eutelsat's current wholesale broadband business and launch a new consumer retail service in Europe. The joint venture will initially use KA-SAT, Eutelsat's high capacity broadband satellite.
Commenting on the new partnership,Michel de Rosen, Eutelsat Chairman and CEO, said, "With KA-SAT, our unique dedicated High Throughput Satellite, Eutelsat has built an effective, high-quality,broadband platform for Europe in which ViaSat has played a key role as technical partner. Broadband is an important component of our strategy, and we seek to partner with market-leading companies that contribute to enriching our offer. ViaSat is a partner that we both trust and value for its track record in setting industry standards and developing technologies that unlock broadband opportunities. Our joint venture will take our relationship to a new level and give further impetus to affordable, high-quality internet services in Europe."
ViaSat's Chairman and CEO, Mark Dankberg continued, "Eutelsat is the clear leader in the European broadband market and is an obvious partner in extending our global reach. We have worked together for more than a decade - creating the satellite broadband market and sharing a vision for the future of satellite broadband. We complement each other extremely well. We offer a powerful team to close the digital divide in Europe today and well into the future. The joint venture combines an unprecedented collection of expertise in satellite operations and technology, broadband networks, and wholesale and retail distribution throughout Europe that forms the foundation for next-generation internet services. We're excited to be working with Eutelsat to bring a proven model to the European and Mediterranean markets."
Since KA-SAT entered service in 2011, Eutelsat has capitalised on its high capacity satellite platform in Europe and the Mediterranean Basin to reach 190,000 customers. ViaSat has proven success in the consumer residential market.
The joint venture will consist of two businesses coordinating efforts to expand the European broadband market:
Wholesale Services will be focused on providing wholesale broadband services in the European and Mediterranean regions, to the newly established retail services business and existing Eutelsat distributors. Eutelsat will contribute its European broadband business, including the KA-SAT satellite. ViaSat will continue to provide selected broadband technologies for KA-SAT gateways and terminals and will acquire a 49 percent interest in the business for a consideration of €132.5 million. For future capacity, the partnership will continue to evaluate over the next few months the ViaSat-3 technology and the extent and the terms under which it would use the European capacity on the new ultra-high throughput ViaSat-3 platform, which ViaSat expects to bring into service in 2020. The partnership will also continue to study other options to add growth capacity in the nearer and long term.
Retail Services will be focused on building a direct-to-consumer ISP business in Europe. Enhanced service plans will be introduced in select European countries throughout 2016, setting a foundation for growth in the retail services business with the availability of future satellite capacity. The business will be owned 51 percent by ViaSat and 49 percent by Eutelsat.
Completion of the transaction is subject to regulatory approvals and other customary closing conditions, and is expected to close during the second quarter of 2016.