Satellite Internet Provider Viasat Faces Subscriber decline in the Face of Starlink Competition
In a recent shareholder letter, Viasat, a prominent satellite internet service provider, revealed a significant decline in its U.S. subscriber base since the launch of SpaceX's Starlink service.
The company reported having only 257,000 subscribers to its U.S. fixed broadband business as of Wednesday, a staggering drop from the 603,000 subscribers it had in September 2020, just before Starlink began inviting its first users to try out the service.
This subscriber count is the first public update from Viasat since May 2021, when the company reported a slight decrease to 590,000 subscribers.
In the intervening period, Viasat has remained silent on its subscriber numbers in both SEC filings and shareholder letters. However, the company has alluded to a "decline in U.S. fixed broadband revenue due to fewer residential subscribers," hinting at the impact of Starlink's competition on its business.
The loss of subscribers is not limited to Viasat; rival HughesNet also reported a decrease of over 200,000 subscribers last year, likely due to the growing popularity of Starlink. While both Viasat and HughesNet entered the satellite internet market years earlier, SpaceX's Starlink stands out for offering a competing system with faster broadband speeds, better latency, and no data caps.
In response to the competitive pressure, both Viasat and HughesNet have revamped their satellite internet plans in an effort to offer improved connectivity at lower costs.
Viasat, in particular, has dropped contracts and data caps in an attempt to retain customers. However, the subscriber numbers suggest that Viasat has fallen behind Starlink, which now boasts over 1.4 million customers in the U.S., although its growth rate is starting to slow.
Despite the significant subscriber loss, Viasat has managed to generate an average of $115 per user in the U.S., up from $102.66 in 2020.
The company has also made strides in expanding its satellite internet service to commercial and business aircraft, with the number of installed systems increasing from 1,480 in mid-May 2021 to 5,600 as of the latest shareholder letter. Viasat also serves over 14,000 naval vessels, another area in which it competes with Starlink.
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