Broadband satellite operator Avanti Communications (LON:AVN) has formally completed in-orbit testing of its Hylas 1 satellite, which was launched last November. The testing process has apparently confirmed that Hylas 1 is working in line with its original specification and, in some areas, delivering a higher performance. The satellite lifetime is expected to be at least six months greater than planned and the available power is several percentage points better than specification. Avanti said this would translate into improved service quality, flexibility and usable capacity.
Avanti is planning to use Hylas 1 to capitalise on demand among rural UK communities for broadband services. With testing complete, those services are set to commence and the first live customer service in the UK will be installed next week. Avanti has a test customer base of 5,000 end users whose service is delivered with leased Ku band capacity. The migration of these customers to Hylas 1 will begin on April 4. Avanti has over 60 Virtual Network Operator customers in 16 countries in Europe which have bought capacity. Many of them are also migrating existing end user customers from leased Ku band capacity on other satellites and this migration also begins on April 4.
David Williams, the chief executive of Avanti Communications, said: “The in-orbit testing phase of Hylas 1 has been a complete success and puts us in a strong position for future growth. With Europe’s first fully operational broadband satellite, Avanti will now provide a range of satellite data communications services to consumers, enterprise and governmental organisations across the UK and Europe. In such a vast market with so much growth in data demand, and a strong customer base already committed, we are highly confident of achieving rapid commercial success for this powerful and flexible satellite.”
Separately today, Avanti said it had signed a seven year contract with a new Virtual Network Operator customer for the sale of 80 Mb of capacity – with volume beginning at a lower level in year one and rising to 80Mb to match the customer's expansion in end users. The contract, which commands pricing which exceeds market expectations, is worth €7.1m over the seven year term. The customer has approximately 3,000 satellite broadband end user installations in Europe which currently use Ku band capacity on a competitors' satellite.
Last month, Avanti reported interim revenues of £1.2m, down from £3.2m a year earlier. Pre-tax losses came in at 6.3m. Avanti’s second satellite, called Hylas 2, is on target for launch in the second quarter of 2012. It will extend Avanti's coverage to Africa and the Middle East. The Avanti Communications share price closed last night at 423.75p.
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