INVESTORS TARGETING WILDBLUE FOR SATELLITE BROADBAND MARKET
WildBlue is becoming attractive to investors interested in satellite broadband market, according to firm’s Business Development & Mktg. Dir. Brad Greenwald. He told us that potential investors saw business opportunity because of reduced likelihood that EchoStar acquisition of Hughes Electronics and DirecTV would be approved (CD Oct 15 p2). After agreeing to DirecTV deal, EchoStar wrote off $50 million investment in WildBlue, and if Hughes deal finally collapses, satellite officials believe there won’t be dominant satellite broadband provider.
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“People believe the satellite broadband market is going to be competitive again so you are starting to see some movement,” satellite consultant said: “There’s a window of opportunity that has opened.” Liberty Media subsidiary Liberty Satellite is latest company to express interest in WildBlue, talking with company about raising $200 million through strategic partnership, Liberty Satellite Chmn. Gary Howard said. Parent Liberty Media owns 85% stake in Liberty Satellite.
Liberty renewed its interest after writing off all or most of its 18.3% stake in WildBlue because of declining valuation. National Rural Telecom Co-op also announced last week it would be willing to invest $100 million in company such as WildBlue to facilitate rollout of satellite broadband service in rural areas (CD Oct 7 p2). Liberty Media Chmn. John Malone promised earlier this year to build satellite broadband network to rival holdings by what he thought would be combined EchoStar and DirecTV (CD June 3 p7). Liberty also has deal pending at FCC to acquire majority stake in Astrolink (CD May 23 p12).
Partnership with WildBlue could fulfill Malone goal of becoming leader in satellite broadband market, one analyst said. “We're looking at investing” in WildBlue with “several strategic partners,” Liberty Satellite spokesman said Wed. Spokesman declined to name potential partners that were being targeted.
WildBlue is “looking for the final round of financing,” and several options have emerged, Greenwald said: “We're moving forward confidently on the financing path.” WildBlue didn’t offer timetable for making decision, but is “close” to making announcement, Greenwald told us: “We're hoping the sooner the better.” WildBlue won’t identify potential partners or amount of money it’s seeking. Greenwald said it had “no plans” to sell, transfer or give up licenses because of funding.
WildBlue wants to use Ka-band satellites to provide high-speed Internet service to homes and businesses beginning next year. Loral is building first satellite, Boeing 2nd, both to be launched in 2003. Greenwald said company wasn’t prepared to disclose marketing plans, but said service would be priced similarly to cable modem and DSL. He said rural areas would be targeted.
EchoStar had been working closely with WildBlue, but has become less active since its takeover of Hughes Electronics failed, industry lawyer said. EchoStar and Hughes said repeatedly in FCC filings that deal was needed to provide high-speed Internet service to rural areas. EchoStar still maintains seat on WildBlue board and “relationship [between companies] hasn’t changed,” Greenwald said. “They are still a very important part of our company.” However, he said WildBlue would “have to see” what role EchoStar would play.