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JetBlue holds out on LiveTV sale while Ka versus Ku battle heats up

Original Article: JetBlue holds out on LiveTV sale while Ka versus Ku battle heats up

Article by Lori Ranson

JetBlue is offering a new rationale in delaying a sale of its LiveTV subsidiary after recently disclosing it plans to hold off on any decisions to divest the company until the debate over the merits of Ka and Ku-band-supported Wi-Fi technologies shakes out.

Speculation has been rife for years over when or if JetBlue would divest its 10-year LiveTV subsidiary, which has bolstered competition in the in-flight connectivity business by partnering with ViaSat to offer higher-bandwidth Ka-band connectivity to airline customers. Both JetBlue and United have committed to the ViaSat-LiveTV offering scheduled to debut on aircraft in each carrier’s fleet later this year.

During a recent investor presentation JetBlue CFO Mark Powers fielded the perfunctory question about the airlines’ intentions for LiveTV over the long term.

After deeming LiveTV a “terrific company, great technology”, Powers did admit that “there is no compelling reason why an airline should own it”.

Powers explained JetBlue likely will “just sort of hold out for a while pending proving the Ka versus Ku difference, and then we’ll look at our LiveTV options thereafter”.

JetBlue and LiveTV have entrenched themselves in the Ka-band camp, after concluding Ku-band-supported technology is inferior. “We played wit the Ku-band…and I think we came to the conclusion that it wasn’t scalable. It really wasn’t something you wanted to pay for,” said Powers.

Unlike LiveTV and JetBlue, in-flight Wi-Fi provider Gogo has declared itself “technology neutral” and recently announced a partnership with AeroSat to offer a Ku-band supported wireless solution that will enable airlines to offer connectivity on transoceanic routes as early as the fourth quarter of 2012. Gogo is also positioning itself to offer Ka-band solutions to carriers by becoming a provider of the Immarsat Global Xpress service. But Gogo does not expect to offer the Immarsat solution until late 2014 or early 2015.

Gogo needs a more immediate solution to offer airline customers that require capabilities to support in-flight connectivity on international flights in the near-term. The company’s long-time customer American has promised Wi-Fi capability on new Boeing 777-300ER-operated flights debuting from Dallas to Sao Paulo in December and between New York JFK and Dallas to London Heathrow in February. American has not revealed a Wi-Fi technology provider for its long-haul international service.

United, which offers Gogo’s air-to-ground solution on transcontinental flights from New York to Los Angeles and San Francisco, has also opted  for Ku-band technology through a deal with Panasonic to offer the technology on the bulk of the carrier’s fleet of 700 aircraft. Roughly 200 of United’s mainline jets will be outfitted with the LiveTV-ViaSat solution. United’s split Ka and Ku-band offering puts it in the best position to determine which technology ultimately takes the prize in creating the cheapest and fastest platform for delivering Wi-Fi to airline customers.

Meanwhile, JetBlue has gone to great lengths to push the case for the LiveTV-ViaSat Ka-band offering, concluding that Ku-band, which is the platform of choice for low-cost carrier Southwest Airlines, as being too costly and lacking scalability. The carrier long ago abandoned the air-to-ground option when LiveTV shelved its Kiteline offering in 2010. JetBlue was the only carrier to test Kiteline, offering the service on a single aircraft. Planned Kiteline trials by Continental were constantly delayed.

LiveTV recently recently concluded a deal to sell its 1MHz slice of the air-to-ground spectrum to competitor Gogo, which will allow Gogo to strengthen its air-to-ground network used by its airline customers that include American, Air Canada, Frontier, Virgin American and United.

While JetBlue has already drawn its own conclusion that Ka-band reigns supreme, it is curious that the carrier is holding off on a sale of LiveTV until the one of the K-band technologies emerges as the victor in the current battle of the satellite bands. It seems to be the latest justification for holding onto LiveTV as analysts hammer the carrier about monetising the business. JetBlue’s constant response to the investor community is a sell-off is not in its near-term plans. So it seems while the reasons may have changed, the message remains the same: don’t look for LiveTV on the selling block anytime soon.

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