Gogo seeks to set industry benchmark, even as benchmarks questioned

Immensely pleased with how 2Ku performs when supported by Epic HTS and paired with Gogo’s new Gilat-made modem, Intelsat VP and general manager of mobility Mark Rasmussen recently proclaimed to Runway Girl Network on board a media test flight from Newark International that, “It’s everything we hoped for years ago when we first envisioned Epic really – to have this kind of technology come to it and exploit what it’s capable of doing.”

To be fair, the flight aboard Gogo’s Jimmy Ray 737 testbed – like the one hosted for analysts immediately beforehand – had access to an entire Intelsat IS-29e spotbeam so anything short of great results would have given analysts and journalists pause. But Rasmussen assured that Intelsat has ample capacity to support current and future capacity requirements.

In addition to the three Epic satellites already in orbit (IS-32e, IS-33e and IS-29e), Intelsat has “four more coming in the next 18 months and so [effectively] global coverage, and we will also layer on top of existing coverage with additional layers of high throughput capacity. So that’s important to us because I think to customers and this industry of aero connectivity, it’s not just about ubiquity and having global coverage but it’s about having density of coverage. So layers upon layers of coverage in any place on the earth where there’s high traffic so that you are not just dependent on one single [satellite] hardware. You have layers of beams that are there to provide throughput.”

Switching beams on the same satellite is “really quick and it’s even possible to do that very seamlessly”, said Rasmussen. Of course, Gogo has also contracted for capacity with SES. And the switch between SES and Intelsat satellites should also be seamless as well. It is “something that Gogo is working [on] with their new [modem] partner Gilat. [And] iDirect has capabilities in that area as well. I think they can comment on exactly what their technology is capable of doing in terms of switching satellites.”

Gogo saw multiple uploads simultaneously on the media test flight, as journalists successfully live streamed and uploaded video (during the analysts’ flight, Gogo saw a download of 33GB+ in an hour to 54+ devices). As 2Ku installations grow, the service will ably support plane-loads of airline passengers streaming video simultaneously, Gogo chief operating officer John Wade assured.

As to how pricing for the service will evolve, Gogo doesn’t feel big pressure to offer free as baseline, despite the fact that ViaSat’s free Ka-powered service on JetBlue generates rave reviews. “I think the thing we’re confident in saying is that as more bandwidth arrives, the pricing to passengers will go down because the cost of delivering those megabytes is going to go down and we can offer a much more competitively priced service,” said Wade.

“We talk increasingly about what we call a multi-payer environment, which is somebody is paying. That might be the passenger; it might be the airline; it might be somebody else. We’re seeing that with T-Mobile in North America where they’re bundling our service as part of their service packages so I think what passengers will see is price points coming down. Will it end up in an all-free environment? I think it’s a little early to be able to tell that, but we certainly are very confident in saying that the days of what’s considered to be prohibitively expensive Wi-Fi is soon to be behind us.”

Does Gogo envisage ever going the megabyte package route, such as rival connectivity provider Panasonic Avionics has done? “I don’t think there is much of a need to do that. In an environment where we’re measuring throughput of 33GB per hour, I just don’t see much of a need to do that,” said Wade.

From a hardware perspective, Gogo has been on the bleeding edge of technological change, from the rollout of its low-profile, ThinKom-made antennae for 2Ku to the Gilat modem which can talk to HTS satellites. The hardware choices made by Gogo have “absolutely” been the right decisions, according to Wade. “There is no question in my mind. [CTO] Anand Chari and his team are the best in the business. I’d be confident to say that; I’d put them up against anybody.”

The spectrally efficient 2Ku has enabled Gogo to make a new promise to industry, mentioned on the firm’s recent earnings call, named “15, 98, 98”. The first number is 15 Mbps to the passenger – “that’s what passengers will be able to expect”. 98 is the percent of flight hours covered by Gogo’s network today, and the second 98 is 98% reliability which is “what we’re achieving today” with 2Ku, said Wade. “And all of those numbers will go up.” If Gogo could make good on its 15 Mbps promise, it would set a new benchmark in the industry; at present, ViaSat’s 12 Mbps commitment is the benchmark. But there are questions around whether per-passenger pledges are even remotely grounded in the real world or simply marketing jargon. Indeed, Gogo itself has poured cold water on the notion that one can provision 12 Mbps to the seat.

“When we introduced 15+ Mbps to each passenger, 98 percent of flight hours and 98 percent system availability on our last earnings call, we did it for a few reasons. One, ViaSat has the industry so confused with their BS that every airline wants to know how much bandwidth each passenger gets. We are ok with doing that, but it is shared bandwidth. It’s no different for any competitor in this space,” explained Gogo spokesman Steve Nolan. “We introduced the other metrics because we want to try and force the industry into some standards to measure service by. Speed, coverage and reliability matter for passengers and airlines.” He later added that 15 Mbps is simply what “people are typically” achieving over 2Ku.

Throwing further shade at ViaSat, Gogo’s Wade said, “There is a lot of, kind of, call it fake news or misleading information but if ViaSat-2, for example, has seven times the coverage area and only three times the capacity … there is actually less capacity over North America really than there was with ViaSat-1 because it is being spread out. Fundamentally, our message about the satellite piece of what we do is we believe in an open eco-system. ViaSat, on the other hand, believes in a closed eco-system. You have to use the ViaSat satellites. What we’re saying is we can go to any [Ku] satellite.”

Added Wade:

We can buy capacity on the market as we need it, where we need it. We are not heating the oceans with transponders where nobody actually flies. And we’re seeing all this innovation in the satellite world that is driving down the cost over and over and over. We will take advantage of that. We are not putting our money into a satellite that is going to reach its economic life before you have to recover your investment. So we’re really convinced our approach will work out economically.

Asked to compare ViaSat’s high-capacity Exede Ka-band service with 2Ku in service (which is enjoying positive passengers reviews) ViaSat director Don Buchman told RGN at the recent Aircraft Interiors Expo in Hamburg: “So right now they’re kind of like the early reports for ATG were great. The early reports for Connexion by Boeing were great. It’s, you know, early days and the cost of capacity and how that equates to experience are two different things. So we will see over time. I mean even the Southwest early reports were really good. It just depends on – can you afford to add capacity to keep up that experience?

“But in a pay model, if you are just paying – where you suppress the usage, you know 6%, 7% 8% take rates – you are going to be able to deliver a decent service, but it’s just you’re not going to be able to grow, and if the market actually moves to where JetBlue is at and where Qantas is going with free and expansive streaming, then do the economics bear out?”

Free “is the way the world’s gone”, noted Buchman. “It’s done in hotels, it’s done in hospitality. It’s done in coffee shops. It’s an amenity. I mean it has happened in IFE. Early on [there was] charging for movies and now it’s all free. And as you have seen, the trend just continues to grow; why wouldn’t connectivity be the same? That’s the new amenity.”

Buchman also batted away any suggestion that the proprietary nature of ViaSat’s satellite architecture will ultimately hurt the firm. Indeed, ViaSat just announced today that it has secured Icelandair as a customer – it’s first TATL airline, whose inflight Internet service will be powered by the soon-to-launch ViaSat-2 satellite. “I don’t really think it’s an open versus closed system” argument, said Buchman. “It’s really what are you buying. Would you pay ten times more for something that is open and you think you can configure it or would you pay ten times less?”

“We make the decision everyday when we [as consumers] buy cell phones and we get into a carrier like Verizon or AT&T. It’s not that the phones can’t go back and forth – it’s like I could probably set up a radio system myself that’s way more configurable to talk to my family – but I am buying into the ecosystem that [goes] with the terrestrial 4Gs, 5Gs, and LTEs. And those are closed networks at the end of the day. So it’s really you’re making a decision as a consumer.”

A couple of years ago, it seemed as if Panasonic was vacuuming up virtually all the Ku capacity around the world. But “no” that’s not the case, said Gogo’s Wade on the test flight. “And there is more capacity coming, and a lot more of it. We’re seeing Intelsat launching its Epic constellation; we’re seeing SES talking about their high throughput satellites being launched as well. We’re seeing other people planning on launching HTS and we’re seeing LEOs coming into the Ku-band. So from our perspective, there is not going to be any shortage of Ku-band.”

Intelsat’s Rasmussen also cited the proposed Softbank-funded tie-up with the OneWeb LEO as being a key play for Intelsat and indeed the entire Ku connectivity camp going forward. “Yes that’s a really exciting thing for us. It helps us accelerate a lot of things we want to do in mobility and we obviously need to get the transaction done and we’ve been working hard on that but when it does get done it’s going to enable us to combine those two fleets in a way that should be really, really exciting and compelling and frankly game-changing. Think about aero connectivity for example – even more throughput available everywhere including over the poles, which is good, and near zero latency. That’s going to be tremendous.”

As previously reported, offering safety services over the LEO constellation, and competing with Inmarsat and Iridium in that arena, is being mulled: “There’s big money there in terms of payback, justification; we are absolutely thinking a lot about that. And then the phased array antennas, you can leverage that, another reason why we need to push those technologies,” said Rasmussen.

But is industry downplaying the complexity of a shared GEO/LEO network? After all, the LEO constellations to support this aren’t operational today – and 2Ku hasn’t proven itself on that front yet – so such roaming via 2Ku is still a theoretical conversation, and it’s being had when a battle of words amongst industry stakeholders is on the cusp of boiling over.

Said ViaSat’s Buchman: ”You have satellites flying overhead that are going to be transitioning all the time, multiple antennas. You know you need to have a lot of satellites to be able to keep your antenna technology on your aircraft pretty simple in order to be able to do all these beam handoffs that are constantly going. But just on the economics right, it’s really not about the aero market, it’s really the global connectivity market and demand. That’s what we are focused on. That is what the OneWebs are also focused on. Aero is again another application.

“…We’ve looked at the LEOs, and we went through all the math and we still are happy with the technology path that we’ve picked with geosynchronous satellites that are highly, highly densified with capacity like ViaSat-3, a terabyte per second-plus of capacity that’s configurable. So you imagine I think it’s 90% of the people on earth live in 10% of the geography. So if you have a LEO system that’s flying around, you have to basically kind of peanut butter your capacity around the entire earth. So with geosynchronous I can actually put the 90% of capacity over the 10% of the spots that people want it. And then serve the rest of the world; 10% over the rest of the geography.”

As for Gogo, the firm continues to face headwinds. Its business aviation unit has always been a crown jewel, generating cash like an ATM while the firm works to make the commercial side cash flow positive (by 2019). Even so, the shorts have been strong.

RGN was recently made privy to an exchange about Gogo between partners within a financial services firm, which gave some colour as to the driver behind some shorts. One party suggested that, “Superficially [it] seems like this could still be a short given the cash burn and eventual obsolescence of ATG.”

This type of talk frustrates Gogo, which is working to roll out a nextgen ATG system on top of its 2Ku ramp up. But it’s also clear the firm has a lot of work ahead of it to reshape its image and be known as a provider of truly broadband connectivity.


Indeed, ATG is so capacity constrained that Delta CEO Ed Bastian verbalized his crankiness about Gogo in a recent interview with Cranky Flier.

“We’ve gotta own that relationship with the customer and we’re working, we’re not letting them intermediate anymore, we’re getting much more active. We’re managing our certifications and we’re managing the supply chain with them, on the ground, and we’re taking responsibility for the communications to the customers more and more,” Bastian told Cranky.

“At some point, we’re going to have to figure out how to get Gogo at the same price-point customers expect the value is, which is free. Maybe there will be a two-tier, free and a premium service. I don’t know what we’ll do, but if we figure that out we’ll be the only airline of scale to have done something like that, and it’ll be a big deal.”

As for “Gogo”-branded Internet service on flights, whether offered as paid or free, “it’s going to fall away over time”, Wade told RGN, reiterating a now regular refrain.

“We’re very comfortable with ‘Gogo inside’ [or] ‘powered by Gogo’, whatever flavor you want.”

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