Viasat has lost the vast majority of its American footprint in the satellite broadband sector, seeing its US subscriber base shrink by approximately 83% since the fall 2020 launch of SpaceX’s Starlink.
The Market Impact:
- Subscriber Erosion: Viasat’s US fixed broadband base fell from 603,000 in Q3 2020 to approximately 100,000 in the current period.
- Latency Disparity: Viasat’s service maintains high latency levels near 680ms, significantly trailing Starlink’s 45ms benchmark.
- Pricing Pressure: Viasat’s premium “Unleashed Max” plan carries a post-introductory price of $179.99, exceeding Starlink’s $130 Residential Max tier.
The 500,000 Subscriber Deficit
The scale of Viasat’s decline is best understood through the lens of its lost volume. Since Starlink entered beta in October 2020, Viasat has shed over half a million subscribers in the United States. While the company saw steady increases in its subscriber count in the year leading up to 2020, by 2024 the company had already lost more than half of its original US fixed broadband base.
ViaSat-3 Flight 2 and the Attempt to Stabilize Yield
In an effort to arrest this decline, Viasat is pivoting its strategy around the deployment of its ViaSat-3 Flight 2 (F2) satellite. The high-orbiting geostationary satellite recently entered service over the Americas and is engineered to deliver download speeds exceeding 100Mbps. This is a significant technical upgrade over previous median download rates of 49.12Mbps reported by Ookla.
During the earnings call, Viasat CFO Gary Chase addressed the subscriber exodus, attributing the recent decline to “seasonally high churn” during the summer months. Following the successful deployment and residential service launch of ViaSat-3 Flight 2 in early October, we initiated targeted plans to take advantage of Flight 2, which is capable of delivering vastly improved customer experiences,
Chase stated. Our plan is to leverage improved performance to stabilize the business over the next few quarters.
To monetize this new capacity, Viasat has introduced “Viasat Unleashed Max.” The plan offers unlimited data and “highest network priority,” with baseline speeds of 80Mbps and burst speeds reaching 200Mbps. However, the transition is difficult for existing users. Moving to a ViaSat-3 service plan requires new equipment and professional installation, meaning current customers cannot simply switch over via software updates.
High Latency and Premium Pricing Challenge Viasat Competitiveness
Despite the technical improvements of the F2 satellite, Viasat faces a problem with latency. Even with the new service plans, Viasat’s broadband labels indicate speeds may drop to 40Mbps during congestion, and latency remains high at approximately 645ms. This stands in contrast to Starlink’s 45ms latency.
Viasat’s new premium tier, Unleashed Max, starts at $109.99 per month for the first year before jumping to $179.99. This pricing structure places it at a disadvantage compared to SpaceX’s offerings. While Starlink has faced complaints regarding price hikes in high-demand areas, it has also utilized aggressive localized pricing, offering discounts of 30% to 50% in select US regions. For comparison, SpaceX offers Residential 100 Mbps and 200 Mbps plans at $55 and $85 per month, respectively.
| Service Plan | Provider | Introductory Price (Year 1) | Standard Price (Year 2+) |
|---|---|---|---|
| Unleashed Max | Viasat | $109.99 | $179.99 |
| Unleashed | Viasat | $69.99 | $99.99 |
| Essentials | Viasat | $39.99 | $69.99 |
| Residential Max | Starlink | N/A | ~$130 |
| Residential 100 Mbps | Starlink | N/A | ~$55 |
| Residential 200 Mbps | Starlink | N/A | ~$85 |
Viasat Seeks Subscriber Stability Through Constellation Investment
As Viasat loses market share and attempts to raise revenue through premium tiers like Unleashed Max, the lack of competition could eventually lead to higher costs for those with no other options.
While Deutsche Bank estimates Starlink has amassed 4.1 million US subscribers, the market is watching to see if Viasat’s capital expenditure on the ViaSat-3 constellation will yield a return on investment. Investors are looking for evidence of subscriber stabilization in the coming quarters, as Viasat aims to use improved performance to stabilize the business.
Disclaimer: The information provided in this article is for educational and market analysis purposes only and does not constitute financial, investment, or legal advice. Always consult with a certified financial professional before making investment decisions.
