WildBlue eyes 2004 launch for low-cost satellite service

PUBLISHER’S NOTE: Please note that, as of 9/29/03, all of your valued Network World Fusion newsletters will be delivered to you from nwfnews.com. If you use filters to manage your newsletters based on domain name, please adjust accordingly.

Telecommuters and branch offices across rural America will have a new alternative for high-speed Internet access in the second half of 2004, when WildBlue Communications of Denver plans to launch its satellite-based services.

Using Ka-band satellites and existing cable modem standards, WildBlue says it can offer significantly reduced equipment, installation and monthly rates when compared to existing satellite or fixed wireless offerings.

WildBlue’s strategy has proven attractive to the venture capital community. In April, WildBlue received a $156 million cash infusion from a group of investors including blue chip venture capital firm Kleiner Perkins Caufield & Byers as well as Liberty Satellite & Technology, Intelsat and the National Rural Telecommunications Cooperative. This latest round of investment brings WildBlue’s funding to a total of $388 million.

“This is the last of their plan…WildBlue is ready to go public or get acquired,” says Kirk Walden, national director of venture capital research for PricewaterhouseCoopers. Walden says the fact that WildBlue operated for three years on funding raised in 2000 shows that they are “pretty strong.”

The WildBlue deal is the largest venture capital investment in the ISP industry during the first half of 2003. Overall, venture firms have pumped more than $488 million in 50-plus telecommunications start-ups this year, according to the MoneyTree Survey compiled by PricewaterhouseCoopers, Venture Economics and the National Venture Capital Association.

In the last few ISP News Reports, we have been looking at Internet infrastructure and service provider start-ups that have succeeded in raising large amounts of money from the venture capital community this year. With cash in hand, these companies are deploying new IP-based services for corporate network managers.

In WildBlue’s case, the new Internet access services won’t be available for another year. WildBlue plans to offer all the key ISP features including e-mail, Web surfing, instant message and Web hosting. But customers can also choose to continue their current ISP with WildBlue’s Internet access service.

WildBlue’s main advantage will be in pricing, company spokesman Brad Greenwald says.

“We believe we have the lowest-cost infrastructure per customer of anybody out there that services customers wirelessly,” Greenwald says. “Our business strategy is to go after those 30 million homes where cable modem and DSL services are not available.”