WildBlue History. November WildBlue Communications, Inc

Transcription

1 WildBlue History November 2007

2 WildBlue Communications WildBlue is a Broadband Internet via Satellite service provider with more than 250,000 customers in the 48 contiguous United States. Headquartered in Denver, Colorado in the U.S. Privately held corporation Entered commercial service June 2005 Growing rapidly more than 20,000 new customers a month U.S. national infrastructure with 2 Ka-band spot beam satellites 11 Gateway Earth Stations Network Operations Center Business Systems Data Center Customer Call Center 2

3 Satellite Telephony Bubble By the late 1980 s, the cellular telephone business was growing faster than anyone had imagined. Possibility of world-wide cell phones from space set off an irrational frenzy in the satellite industry in the early 1990s. SYSTEM Primary Investors First Satellite Launched Service Launched Bankruptcy Filing Estimated Money Lost Iridium Motorola 05/05/1997 (90 total) 01/01/ /13/1999! $8B Iridium GlobalStar Loral; Qualcomm 09/09/1998 (52 total) 01/10/ /15/2002! $5B Odyssey TRW; Teleglobe never never Abandoned 12/01/1997 $1-2B Globalstar Satellite telephony only worked outdoors, required big heavy phones with limited battery life they were not cell phones; a limited market. 3

4 Satellite Data Bubble Early in the Satellite Telephony frenzy, before any hint of business failure and multi-$b losses, an even more irrational Satellite Data frenzy broke out. On 12/03/1993, Hughes Aircraft Company, parent of DirecTV, filed with the FCC for the first Ka-band satellite, Spaceway. The FCC was surprised; they had no process for satellite licensing in the Ka-band On July 28, 1995, the FCC issue a call for Ka-band satellite applications and set a deadline of September 28, companies filed new or amended applications 4

5 15 First Round Ka-band Applications September 28, 1995 Applicant Satellites Orbital Slots Ultimately Awarded Comm, Inc. (Motorola) Millenium 75W, 77W, 87W, 91W Echostar None 83W, 121W GE-Americom GE*Star 17W, 85W, 105W, 56E, 114.5E Hughes/Galaxy Spaceway KaStar Satellite Ladybug 1, 2 73W, 109.2W 49W, 67W, 99W, 101W, 25E, 36E, 40E,48E, 54E, 101E, 111E, 124.5E, 149E, 164E, 173E Lockheed Martin Astrolink 21.5W, 97W, 38E, 130E, E Loral Cyberstar 115W, 28E, 105.5E MorningStar MorningStar 62W, 147W, 30E, 107.5E NetSat 28 NetSat 28 95W Orion (3 companies) Orion F2 F9 47W, 81W, 89W, 78E, 126.5E PanAmSat PAS-10, W, 58W, 45W, 68.5E, 72.7E, 166E VisionStar VisionStar 113W Teledesic Teledesic 840 Ka-band satellites in low earth orbit Guess the only one of these companies to offer a Ka-band data service to date? 5

6 Teledesic Craig Macaw, Bill Gates venture with Boeing, Motorola, others Announced on March 21,1994 and seeded with billions in cash Was to be a constellation of 840 Ka-band satellites in low earth orbit Nearly free OC-12 s for everyone, everywhere All interconnected with lasers, 8 per satellite Unimaginable technology Licensed by the FCC on March 14, 1997 for worldwide operations in the Ka-band Officially abandoned on June 27, satellites! Teledesic Satellite Concept 6

7 KaStar Established in October 1998 May 8, 1997 the FCC licensed 109.2W & 73W orbital slots to KaStar October 1, 1998 KaStar opens for business 7

8 WildBlue Timeline: Start-up Phase 8/10/1984 ACTS satellite contract awarded to RCA AstroSpace 9/12/1993 ACTS satellite launched 12/3/1993 Spaceway FCC filing 4/21/1995 KaStar established as a Colorado Corp 7/28/1995 FCC calls for 1st round Ka-band filings 9/29/1995 First round FCC filings due date 3/14/1997 Teledesic FCC license granted 5/9/1997 FCC first round assignment order 10/1/1998 First two WildBlue employees 10/19/1999 KaStar renamed isky.net, then renamed isky, Inc. on 12/3/ /2/1999 WildBlue-1 contract with Loral signed 3/17/2000 WildBlue and Telesat sign Anik F2 lease agreement 3/24/2000 WildBlue invests in US Monolithics 8/14/2000 isky, Inc. became WildBlue Comm. 3/5/2001 ViaSat SM/SMTS contract signed KaStar was founded in April 1995 and filed with FCC Grew to!10 people by end of 1999 and to!40 people by the end of 2000 Raised!$250M; early investors were TRW/NGC, Kleiner Perkins Caulfield & Byers, Telesat Canada, EchoStar, TV Guide, Liberty WildBlue-1 QuickStart (22 months) contract with Loral signed in Nov 1999 Invested in US Monolithics in Mar 2000 Anik F2 Ka-band payload lease signed with Telesat in Mar 2000 Original Ariane, ViaSat contracts signed KaStar became isky, then WildBlue 6/25/2001 Telesat takes equity stake in WildBlue 8

9 WildBlue Timeline: Dark Days 9 9/11/2001 9/26/2001 Terrorist attack on the United States WildBlue-1 satellite contractual ship date 11/6/2001 Astrolink folds; closes down 12/ / /18/2002 All WildBlue contracts suspended or terminated; project put on hold WildBlue licensed by FCC to use Anik F2 in the US Terrorist Attack September 11, 2001 Prior to 9/11/01, we were working on several sources of new funds 9/11 attacks wiped out any hope of continuing the project as planned Company chose to weather the storm with an assertion that the business plan was sound and economic conditions would improve eventually Renegotiated/delayed all of our contracts Hunkered down with 9 remaining employees Sold our stake in US Monolithics to ViaSat in Jan 2002, the proceeds of which provided cash to stay alive for at least a year Spent all of 2002 looking for new partners, modified business plans including video broadcast, etc.

10 WildBlue Timeline: Dark Days Dow Jones Industrial Average 2001 Economic Impacts of 9/11 Were Hard on WildBlue Early 2002: Reports of our death were greatly exaggerated. We Explored Every Mickey Mouse Idea (Well Almost!) 10

11 WildBlue Timeline: Recovery & Growth 11 12/23/2002 4/22/2003 Liberty, Intelsat, NRTC, Kleiner announce $156M investment to restart WildBlue Liberty, Intelsat, NRTC, Kleiner close $156M investment 6/27/2003 Teledesic Folds 3/28/2004 Spaceway F1, F2 sold to DirecTV for video 4/28/2004 ACTS decommissioned 7/17/2004 Anik F2 satellite launched 10/18/2004 4/26/2005 6/3/2005 8/21/ /1/ /2/2006 First sent over the WildBlue network Spaceway F1 satellite launched by DirecTV for video WildBlue enters commercial service WildBlue closes $350M debt facility with Liberty, Tennenbaum WildBlue reaches 100,000 subscribers WildBlue-1 satellite actual ship date to the launch site 12/8/2006 WildBlue-1 satellite launched Liberty, Intelsat, and NRTC with Kleiner Perkins and David Drucker invested $156M to restart WildBlue Company restarted with a one satellite business plan based on Anik F2 WildBlue-1 satellite was completed and placed in storage at SS/Loral Began rehiring in April 2003 and entirely rebuilt the company during the second half of 2003 Successful launch of Anik F2 satellite occurred in July 2004 Massive effort to build out the gateways, IT systems, NMS systems, CPE manufacture capability Commercial service was established in June 2005.

12 WildBlue Timeline: Recovery & Growth WildBlue Team July 17, 2004 Anik F2 Launch July 17, 2004 Anik F2 Launch Party First Customer June 3, 2005 Echo/DirecTV June 8, First WildBlue October 18, 2004

13 Today s WildBlue >250,000 subscribers, healthy growth rate Approximately 250 employees Exclusive distribution agreement NRTC Exclusive distribution agreements with both major US satellite TV companies, EchoStar & DirecTV Strategic distribution agreement with AT&T Two operational satellites providing CONUS service WildBlue controls almost 100% of bent-pipe Ka-band spot beam satellite capacity over the United States. 13 The little bug that just never gave up

14 Rural Broadband Users % - 35m Have Access To Cable Modem/ DSL (21m) 14m Don t use Internet (4.9m) DON T Have Access To Cable Modem/ DSL (14m) Dial-Up Subs (8.6m) WB Target Market Satellite (0.3m) Fixed Wireless (0.2m) 14 Homes & Small Offices (Rural = C&D Counties) Homes & Small Offices (Rural = C&D Counties) With No Access To Terrestrial Broadband

15 Satellite Broadband Market Size Forecast (millions) # Rural homes/sohos # Rural homes/sohos w/ no terrestrial broadband access # Rural homes/sohos w/ no terrestrial broadband access that are online Satellite broadband subs Satellite broadband subscriber penetration of rural online w/no terrestrial broadband access 6% 10% 15% 17% 23% 15 Source: U.S. Census 2005, Frost & Sullivan 2006, WB estimates

16 Key Drivers of Satellite Broadband Market Social Trends Urban & second home movement to rural areas for lifestyle Long-term reduction in rural jobs Telecommuting Product Trends Decline in upfront price Demand for speed & capacity (usage) Competitive Trends Growth of DSL/CM (assumed very low)! LECs: we will not serve 20% of our customers with DSL Growth of fixed wireless Expansion of nascent technologies (BPL, 3 or 4G, etc.) 16

17 Satellite Provides Ubiquitous Coverage 17

18 Network Architecture Subscriber Terminal Space Segment Gateway Earth Stations WAN/LAN Connectivity NOC and OSS/BSS Internet DOCSIS-based Standard Platform Simple Bent-Pipe DOCSIS-based Unmanned Facilities Leased connectivity DOCSIS-based Commercial Products 18

19 Our Bread & Butter Market 19

20 WildBlue vs U.S. Homes (Density Comparison) Density U.S. Homes WB Customers (Homes/mi 2 ) Cumulative (m) Cum % Cumulative Cum % % 19,082 45% % 26,374 62% % 29,285 69% % 31,621 75% % 33,116 78% % 34,299 81% % 35,139 83% % 35,753 85% % 36,279 86% % 36,714 87% % 38,124 90% % 38,808 92% % 42, % Total ,266 Source: WB Analysis, U.S. Census data 20

21 Broadband Market (by Technology) 60 U.S. Broadband Customers Satellite Fixed Wireless DSL Cable Modem Q'05 4Q'06 Source: Jupiter; ignores BPL subs 21

22 Technology Comparison 2005 EOY Subscribers Growth (CAGR) Pro Con Cable Modem/DSL 44.6 million 10% Speed Price Local Presence Bundled offering Fixed Wireless 0.2 million 32% Price Local Presence Not ubiquitous Not ubiquitous Mostly unlicensed spectrum (except Sprint/Clearwire) Must choose where to build Satellite 0.3 million 42% Ubiquity CPE Cost Unproven VoIP offering Time to market for new capacity Broadband Over Power Line (BPL) <0.1 million n/a Price Local Presence Some existing infrastructure Cost Not ubiquitous Must choose where to build 22

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