Welcome to ViaSat Full Year 2017 Fourth Quarter Earnings Conference Call. At this time, all participants are in a listen-only mode. Later, we will conduct the question-and-answer session and instruction will follow at that time. [Operator Instruction] As a remainder, this conference is being recorded. Your host for today's conference call is Mark Dankberg, Chairman and CEO. You may proceed, Mr. Dankberg.

Okay, thanks. Good afternoon everybody and welcome to ViaSat's earnings conference call for our fourth quarter and full year of fiscal year 2017. I'm Mark Dankberg, Chairman and CEO and I've got with me Rick Baldridge, our Chief Operating Officer and President; and Shawn Duffy, our CFO; Robert Blair who is now our General Counsel; and Bruce Dirks, our Treasurer; Keven Lippert, who was General Counsel is now our President for Satellite Services. Before we start, Robert will provide our Safe Harbor disclosure.

Thanks, Mark. As you know, this discussion will contain forward-looking statements. This is simply a reminder that factors could cause actual results to differ materially. Additional information concerning these factors is contained in our SEC filings, including our most recent reports on Form 10-K and Form 10-Q. Copies are available from the SEC or from our website. With that said, I’ll turn it back to Mark.

Okay, thanks. So, I hope you’re referring to slides that are available over the web. I’ll start with some highlights in a top level business overview and then after that Shawn will discuss the consolidated and segment level financial results, and then I’ll give some additional details and color. And finally, I’ll summarize our outlook and we will take some questions. So, we will organize our discussion around three main themes for this quarter. First is growth. Companywide revenues for our fourth quarter grew 12% year-over-year and 10% for the fiscal year as a whole to a record of $1.56 billion. Government Systems led the way in our fourth quarter with 20% year-over-year growth and 13% for the fiscal year as a whole. Satellite Services grew 11% in the fourth quarter and also 13% for the fiscal year as a whole. We feel we are well positioned for sustained growth. New orders for the year were a record at $1.66 billion; government orders were over half that amount at a record of $851 million that’s about 24% higher than this year's government revenues. We’ve got current backlog of over 830 commercial in-flight connectivity orders scheduled to begin installations in our second quarter of this fiscal year 2018. We now have 559 commercial aircraft in service that’s 17% increase over last year. Although it's still a relatively small part of our Satellite Services business, in-flight connectivity revenues are up 40% on a year-over-year basis. Our backlog creates a good opportunity to sustain rapid growth and the momentum in that industry continues to be strong. While the launch delay on ViaSat-2 coupled with the high utilization of our existing satellites is a headwind, we can still anticipate good year-over-year revenue growth in our fiscal year 2018 and beyond. Second point is our…

Thanks, Mark. I'll spend just a few minutes on slide four, which shows revenue and adjusted EBITDA performance for the fourth quarter. But before I turn to the details, I wanted to touch couple of high points. Our Q4 reflected another very good quarter with strong financial results and many new records. Our existing businesses are generating excellent growth, double-digit level performance, which supports the significant investments we’re making to expand our global KA capacity by nearly 15x through our ViaSat-3 program. Alongside there is substantial investment in next-gen aviation solutions and FCCs, our fast growing commercial air Wi-Fi business. To put it in perspective, our Q4 adjusted EBITDA performance excluding our ViaSat-3 R&D investments is trending over a $100 million per quarter. Looking to the segments for the quarter, as Mark mentioned earlier, we achieved another quarter of record revenues of 416 million in Q4, primarily driven by our Satellite Services and Government Systems segments. In Satellite Services, revenues were up 11% year-over-year due to higher consumer ARPU which was up 13% on a slightly lower sub base, plus we had nearly 100 more commercial aircraft in service on average during the period with greater usage per aircraft with the in-flight connectivity revenues 40% year-over-year. With continued service offering expansion such as VoIP, 25 megabit per second speed plans, in-home Wi-Fi and extended care packages in residential, plus broader in-flight solutions and networking enhancement, we have been able to continue to grow -- improve on our bandwidth economics, which led to over 70% of our year-over-year segment revenue growth falling straight to earnings, generating the segment adjusted EBITDA increase of 18% to $75 million along with margin expansion to 47% up about 280 basis points from last year. Our Government segment also had a very strong quarter with top…

Okay. Thanks, Shawn. So, this next slide gives an overview of our exceptional Government System segment performance in a challenging defense environment. In fiscal 2017, we delivered mid-teens growth in revenue, adjusted EBITDA and new contract orders, all setting records for the Company through a very good year across the board including tactical data links, cybersecurity and satellite products and services. We won programs of record and also created new products and services that end users need but aren’t delivered through the DOD’s acquisition processes. At second skill, filling in the gaps in the acquisition system has been a key to strong growth despite the macro environment. We’ve invested wisely in R&D and have leveraged foundational satellite technologies that are driving growth in our commercial markets too. One way to think about it that we have much defense experience and capabilities than other commercial companies offering comparable services to the defense department in a much more commercial business approach than the pure play defense companies. Our market position has been very effective in navigating a time of great change in our national defense missions and competitive posture. The top and bottom line results speak for themselves, but we're also pleased with the business mix stride in that growth. This year, we were in several contracts that effectively scaled up products and services to organizations and/or platforms that we had initially captured in prior periods, such as solving 16 terminals on Apache helicopters or tactical encryption devices. But we're also introducing new products and services to new organizations and platforms that have good opportunities to scale even further in the future, such as handled Link 16 radios and cybersecurity for mobile satellite broadband, as well as new satellite products and services for a verity of mobile platforms. So, going forward, we…

[Operator Instructions] And our first question comes from the line of Rich Valera from Needham. Your line is now open.

I just wanted to get a little color on your thoughts on the timing and magnitude of the ramp of your in-flight installs. I think you said in your second fiscal quarter, you expected that to start. Could you give us a sense of kind of what kind of quarterly rate you might expect that to get to as you start executing on your backlog, particularly in American planes?

Yes. It’s Rick Baldridge. Since right now, we're in a little bit of a pause in the new equipments going to airplane, so still start ramping late this quarter and kind ramp through the year. On a quarterly basis, we get -- we don’t get a full rate within this calendar year, I think that happens in early next calendar year. That should be -- should get that over, definitely over a 100 a quarter in early next calendar year.

Got it. That’s helpful. Thank you. And I just wanted to get your thoughts on ARPU which were pretty exceptional this quarter. I mean, the quarter-over-quarter growth was quite impressive. It sounds like you expect to be able to continue to grow ARPU, but just wondering if we think about what kind of rate you can grow ARPU over the next year or so, how we should think about that relative to prior trends?

It's like Mark said, we are making some trades. One of the things that doesn’t get included in that ARPU number is what's going on in the other services, like some of the stuff we’ve gotten in emerging markets and so we exclude that. So, we think in the residential ARPU, we’re going to still three migrations towards retail from wholesale, so that will because ARPU to continue to grow. And we are selling, like Mark mentioned, we are selling services that have generally higher speeds and higher volumes in preparation for ViaSat-2 service launch. So, I think ARPU is going to continue to grow fairly strong. We haven’t given specific indication but offsetting that is certainly these reductions in absolute subscriber count. And so, overall, the revenue in that business we are expecting closer to flat for this next year.

Got it and just one more if I could, just sort of bigger picture. You’ve alluded to the fact that JetBlue among others have heightened the awareness of carriers to quality broadband. Can you talk about broadly in the market how that’s affected your pipeline and the prospects for getting more business, particularly on the international front? Just give a little bit more color on what you are seeing out there with in terms of awareness of broadband?

One of the big things that JetBlue has done with their free services is that the number of passengers that use it by far much higher than any other in-flight service. And I think that some of that’s because it’s free but JetBlue is benefiting from that passenger satisfaction engagement that comes with that high penetration. So, I think that -- that’s I think one of the most powerful factors that stands behind our growth that if you need -- like one way you can define a good in-flight connectivity services across $35 or $40 and it works okay. And another one is that it's free and everybody uses it and it works really well. And I think that that’s kind of a contrast in terms of customer experience. One of the things we’ve been clear on is that the ability to deliver that is really a function of the satellite. There is nothing you can do with the modem or antenna on an airplane that changes the satellite being the bottleneck for delivering good service to higher numbers of passengers. So, for us on an international, really the way we’ve grown is we’ve grown as our coverage footprint grows. So, it's been U.S., Europe when we were able to hide up the service on KA-SAT, Australia with NBN. With ViaSat-2, we are going to be able to transatlantic; Latin America, Caribbean. So, that’s how we’re expanding. ViaSat-3 is really the kind of a transformational factor that’s going to enable us to get to worldwide coverage. And as we are getting closer and closer to the launch of ViaSat-3 and looking at the timelines at which the stuff has deployed, it’s becoming more and more real and immediate to the airlines. And so, those are the factors that are influencing our success in the market and we think those are only going to get better.

Thank you. And our next question comes from the line of Mike Crawford from B. Riley. Your line is now open.

Thank you. Thanks for showing those ViaSat-3 modules and I'm wondering how do those compare with the hardware you provided for Iridium Next?

Okay. So, Iridium Next is basically what we did on that was KA-band space to ground and space to space inter satellite links. So, I would say the level of integration is a little bit comparable; I think ViaSat-3 is more integrated. But, the amount of bandwidth that we're delivering on Iridium Next is tiny-tiny fraction of what we do on ViaSat. And the Iridium satellite is -- I'm not to specify but it's got to be over a 1,000 times or less than the bandwidth that’s on a ViaSat-3. So that -- the biggest issue there is scale. The underlying Ka-band technology we kind of proved out in the Iridium program.

Okay. Thank you. And then just regarding the majority of subsidiary, TrellisWare that makes these advanced wave forms, how do wave forms compare to the ones that you are developing and working within in the government systems arena such as your Link 16 and other solutions? Do you use TrellisWare or is that separate?

TrellisWare and our Link 16 right now deliver -- really address two different markets. Link 16 is primarily an airborne situational awareness link; and the work that TrellisWare is doing primarily ground handheld radios. There's definitely an opportunity for those two markets to converge in the future, if you think about air to ground communications and ability to closely integrate ground with airborne support. But right now, they're sort of on two separate tracks.

Right, including the HHL 16 radio?

Right. So, the handheld, the Link 16 radio is really a way for ground users to tap into the airborne situational awareness that Link 16 provides. And there is a video that the air force put out six months, nine months ago that talked about how they could apply that. It's really a way for ground tactical operators to coordinate more closely and more quickly with close air support.

Okay. Thank you, just one more if you don't mind. So, in emerging markets, you've talked about entering those different capacity, probably a Wi-Fi hotspot model with prepaid airtime and you talked about it has to do in Mexico but you've also mentioned another foreign places like Venezuela and Colombia that seem to be outside of the footprint ViaSat-2 that you show, for example, in the presentation today. So, is it -- does the footprint actually -- how far into a place like Colombia does ViaSat-2 footprint reach?

ViaSat-2 footprint goes to the northern tip of South America which is where Colombia and Venezuela are. And even though we don't cover all of those countries, we do cover the coastal areas which is where most of the population is. So, those are -- they are candidates for us. As we have mentioned multiple times, one of the good things about ViaSat-2 is we have the ability to move bandwidth around. So, if there are market opportunities for us there, we can go that far out; if not, we can use a bandwidth in other places.

Thank you. And our next question comes from the line of Louie DiPalma with William Blair. Your line is now open.

Mark, on EchoStar, on its earnings call indicated that it expects to make a final decision within the next few months regarding Jupiter-3. I was wondering if there is any potential for ViaSat and EchoStar to form a ViaSat-3 partnership similar to your proposed partnerships with Eutelsat, or do you view the existing duopoly market structure with each provider launching satellites in tandem as the most efficient over the long term?

Well, there is a bunch of speculations associated with that but we are not going to speculate. But I wouldn’t say that two sets of satellites is the most efficient.

Okay. On another topic, I guess the backlogs for in-flight connectivity increased last quarter from 750 to 830 and it appears that Icelandair was for 16 aircraft; was the remainder for Qantas converting from a trial to a commercial order or was there an unannounced win in your backlog?

There are not unannounced wins at this point. So all of the growth from backlog is from our existing airline customers.

It is mostly Qantas.

Okay. And lastly, could you provide more color on how the defense market is challenging? It seems that a lot of the defense contractors such as Raytheon and Lockheed Martin are seeing strong demand with all the geopolitical uncertainty?

Well, it's challenging. I think there is two parts to it. One is if you look on that graph, you can see sort of what the trend -- has been over the last eight or so years in terms of government R&D spending and procurement. And it looks like that may pick up. But the other challenge has been just on the whole budgeting process. And we have been operating under continuing resolutions for so long. And that’s a little bit tricky because continuing resolutions are really meant to preserve current spending rates on each -- kind of on each individual program line item. And we have been growing at a very good rate. So, you’ve got a somehow harmonized, figuring out how the -- I think we and our customers have figured out how to harmonize growth in our programs with that continuing resolution environment.

Great. And one last one for Shawn. Shawn you and Rick previously indicated that total R&D in fiscal year 2018 should be a roughly the same as fiscal 2017. And I was wondering if that view has changed at all, and if that takes into account any potential spending on ViaSat-3 Asia?

Yes, sure. So, I think what we have talked about is that the ViaSat-3 activities are going to continue to ramp on an accelerated rate and to the first half of next year and continue throughout the year. So, I think as R&D being somewhere between 15% and 20% on year-over-year basis and you got [audio gap] we're going to have…

Related to ViaSat-3.

Related to ViaSat-3, yes. And then, you’ve got to include into that we have some additional STC expenses that can cause some variability. But it’s going be definitely in the first half of the year and then up a little bit over year over year.

Okay. And are you guys pursuing line-fit or ability for the other airframes besides the 737 MAX?

Yes.

Thank you. And our next question comes from the line of Chris Quilty from Quilty Analytics. Your line is now open.

A quick question just back on the IFC market. I know amongst the many service providers out there, there is lots of different revenue models that both the airlines are using as well as the service providers. Can you give your sense of where you think things will go in terms of free across all the airlines versus some of the airlines that are using per megabyte packages and tagged on to that, what are the metrics that you're using, is it sort of a monthly charge per aircraft or per number of passengers that you think is optimal for you on a service provider side?

The models are certainly going to evolve. I mean, I think that the airlines are learning, different airlines are learning in different ways but they are just learning sort of what the overall role of in-flight connectivity is on the whole passenger experience. Essentially, just think of it is, they are trying to buy customer satisfaction, invest viably in customer satisfaction and they can do that with meals, they can do that with in-flight entertainment, they can do it with seats, they can do with Wi-Fi and connectivity. There is multiple ways they can do it. But what we believe is that and surveys from multiple sources show this is that in-flight connectivity is one of the most desired amenities. And what we’re showing is that when you deliver it on a very large scale, you can do it at a very low cost. And that was kind of the JetBlue approach pretty much from the beginning; it seems to be working for them. Also you see on in-flight entertainment that whereas people used to charge for that that’s become free. Other things are going the opposite direction; meal used to be free in a lot of places, now you pay for them and carry-ons used to be free and some airlines are charging for those. I think it's going to be a shake out of what the passengers like. Our sense is that the passengers really like and value in-flight connectivity. And then you can add to that that whole landscape there, the fact that. Getting the attention of airline passengers is pretty valuable to a lot of different media companies, internet companies and sponsors, and we are seeing with JetBlue and with others that under the right circumstances, if the passengers associate their brand with a good experience, that’s valuable to those companies and that can further offset the cost of the in-flight connectivity. So, I think it’s going to take a little while for all this stuff to shake out. I think that as more and bigger airlines signed up and sign up with the objective of really improving that connectivity experience and reaching more passengers, I think you’ll see more and more influence sort of ripples through the route system each airlines affected by what the competition is, the routes that are most important to it. I think those are factors; we’ll have to see how it plays out.

Let me ask the question in different way. Are all of your customer contracts substantially the same in the way that they are structured and have you seen any push back from customers that want to buy capacity in a different way?

One is we are there to help the airlines make more money. So that’s the purpose of the in-flight connectivity. So, we are not trying to pose on the airlines any particular rigid way of doing it. So, we will work with airlines to come up with a program attested to their needs. So that’s what we are doing. I think that the airlines, all are aware of these trends. And even if they don’t go with the free model as example, where the model that we would suggest, we’ll do it the way they like but they all sort of can see that free is a likely outcome. Whether it takes a year or two years, three years that that’s probably where it's going to end up. And so, no matter how we start, we give the airlines optionality to figure out a good way to get there on their own.

On the other side of the mobility, your government mobility has grown real nicely in recent years. Are you tapped out on the number of platforms that you can address with that legacy KU network? And where do you see that eventually converting to KA, if you do?

No, we are not tapped out. We are seeing very good growth. I think a lot of our government customers who like the optionality and flexibility that KA, KU gives them. So, we can do KA, we can do KU, we can do KA and KU integrated. And all of those things are happening. I think that most of our defense customers recognize the value of the KA-band satellites and that as the ViaSat-3 series gets closer and closer, we are going to see most of the usage go on those.

And question for Shawn. Can you remind us from an accounting perspective, how and where you are reflecting the Eutelsat arrangement? And how it impacts ARPUs and whether you’ll ever report separate subs on that business?

So, the connected is the simplest form. It's very consistent while we’ve talked about in prior periods. The retail co entity is entity we own 51% of and they will be consolidated into our financial. So, we will have all of those revenues and expenses going down, we’re going offset [ph] as the 49% owned by Eutelsat going to minority interest. On the infrastructure side that we own the 49% of, that’s going to come in as an equity method investment as a one line item in statement [ph] and we are going to get our percent of their earning offset from the [ph] acquisition accounting adjustments that we do. So that’s how we will come into the financials. And as it relates to the subscribers I think we're going to have very similar reporting to what we do in our U.S. market. And you we’ll continue to address that as we define a little bit more good offers, will be there.

And one final question on the subscribers. I think EchoStar talked about the fact that they had converted their relationship with DISH from wholesale to retail. Is it fair to assume you're doing the same?

Yes. I mean that was a decision on DISH 's part. So, we expect that's how we'll do most of our business, most or all of our business with DISH, after some transition.

On a go forward basis, so they'll continue to own the existing wholesale subs?

Yes. Right, the existing subs that they own -- they will own.

And final question just on Qantas. I've read some stories that they're doing better than expected in Australia with those Skymaster satellites on the retail side that the capacity's getting sucked up. Where does that leave you in terms of the Qantas model for KA-band and can you also discuss the sort of KA KU strategy there?

So for domestic Australia, we've gone through this with [technical difficulty] their primary mission is to provide service for residential and we work with them to go through allocations or what the impact of the in-flight service would be for Qantas and it’s negligible. I think that NBN is comfortable with supporting Qantas for the service that Qantas wants and expects. So, I think that's worked out. I think that the Qantas international long haul is a different topic and not really prepared to discuss that at this time.

Obviously, ViaSat-3 Pacific would solve those issues?

Yes, absolutely. And certainly it could also augment any issues that Australia has in terms of bandwidth available for to it and to subscribers.

I would think so.

Okay. Mark, why don't we take one more question?

Thank you. And our last question comes from the line of Andrew Spinola from Wells Fargo. Your line is now open.

Thank you. Can you clarify the comment about satellite services revenue being flat next year? Does that include contributions from Eutelsat or not?

No, it doesn't include anything from Eutelsat.

Got it. In terms of the aero ramp that's in front of you guys, how do we get comfortable, not so much with the satellite side but more of the structural engineering side regarding the STCs and your ability to install? You're talking about getting to a rate over a 100 per quarter next year, you’ve sort of been the wholesale provider in the past. So, what sort of milestones, where are you in terms of certifications and how do we are comfortable that you can sort of scale to that that type of install rate?

We're -- we really can't talk about in line installation certifications as an agreement with Boeing. But, we've made great progress on getting through the certifications with our new product, this next generation set of equipment. And so, we plan to be installed well ahead of ViaSat-2 satellite availability on all those. So, we are starting soon. And we could I mean 100, 122, 100, that part is -- just takes a little bit of time. But it's not a limiting factor for us. More of a limiting factor is for the airlines is how many -- how -- to get the airline offline around their maintenance schedules and get the installations done. That is not an equipment availability issue, it's really airline installation issue coordinate that with each airline.

But I mean from of an engineering perspective, I mean we have been through it. I think one of the strengths of us as a company is we do a lot of airborne satellite work both with DOD and with business jets and commercial airlines. So, we have been through it, we think that they are well engineered. There will ultimately be rate at which they’re installed and the retrofit is going to be driven by the rate at which the airplanes are made available by the airlines.

On a consumer broadband side, I think you sort of made a comment that net adds will sort of – can see that at these levels. Given that in the future quarters before ViaSat-2 how to use in the market, is there any way for you guys to defend against used by upgrading customers that are off contract or are there any things that you are doing to defend that your existing position? And why shouldn’t we expect churn maybe to kick up a little higher so that net adds turn more negative during the rest of the year as you have this competitor in the market that has capacity?

Well, they are good questions. I mean, they’ve been in service on the new satellites for over two months. So, we have a little bit of a feel for what's the competitive landscape is. And I think the service plan they are offering are pretty comparable to what we have -- I think 25 megabits and we also have 25 megabits [technical difficulty]. I think they are doing more price promotions, which are valuable. And certainly because they have way more capacity than we do, and I think this is the biggest factor that it makes sense for them to spend a lot more money on advertising and promotion than we do. So, their share of voice is high. But on the other hand we have in front of us a satellite that we think will allow us to offer better plans. And so one of the ways that we can deal with it, one of the tools is to start improving our plans as in anticipation of what the ViaSat-2 plan will be in a selected spot beam environment. But there is still plenty of demand. I think we don’t dismiss the questions that you are raising, but so far experience has been that we think we can do what we have described and that’s what looks like the outlook is through the end of this calendar year when ViaSat-2 goes into service. The other thing is I think that the target market that we are aiming for is much bigger than a market of just between us in use. I mean that we are not sighting over every subscriber with you at speeds of 25 megabytes per second; we are really better than -- I think it’s probably for sure better than the average of broadband in the U.S. So, it’s a pretty broad market. So, we will see when we will report next quarter, but so far that’s really how it looks.

Only thing I’d add Mark is that we do have -- we have demand for bandwidth with other applications right now. So, part of it is as we do turn people often, we said earlier that we do expect subscribers will go down over the year. We've got uses for that bandwidth.

Got it. That’s helpful, one last question for me. Mark, you made a comment earlier, in your work with JetBlue, you're looking to help improve the economics to them with the next generation solution. And given they’re at unlimited now at a certain ARPU, I'm sort of asking the high level question about ARPU. As airlines get to this unlimited plan, is it -- I mean, are we in a deflationary environment going forward such that you will be passing along some of this benefit to the airlines and how do we think the average revenue per plane going forward as plane sort of airlines reached this unlimited level like JetBlue?

So, good question. So, yes, one of the things we’ve been pretty vocal and we did again here, we're trying to drive down the cost band of it. And we're offering to share those savings with our customers whether they’re residential, government or commercial air. So, what that means is you got these offsetting factors which is just doing the same things on an airplane, take more bandwidth each year, right. Websites have more integrated videos, social media has more integrated video. So, if you do nothing else, bandwidth consumption would go up. The other thing that we're trying to do with JetBlue is to increase -- help them increase engagement. They find that passengers that use the in-flight connectivity are happier that they are more likely to fly at JetBlue again at a presence for the airline. So another way to increase bandwidth usage is to get more engagement. And finally, I think we're just scratching the surface of how people are going to use streaming media on the airplanes. I think that you will see more and more choices for over the top live TV services, more choices for sports. And I think that will drive more bandwidth consumption and then also as device screens get to the higher resolution that will also drive more bandwidth consumption. So, you’ve got all these factors that we think could improve the overall passenger experience and we can improve their economics by passing on some of the savings on bandwidth cost. I mean other thing that we can do is working with JetBlue and we're also doing the same with these other new airlines is that as engagement grows and more and more people are aware of it, there are more opportunities to get revenue from sources other than the passengers. So we're pretty actively engaged with that. And that’s another way to help JetBlue and our other airlines improve their economics.

If I can just follow up on that. I guess, so will the demand from the airlines exceed your cost improvement and the capacity such that you think for a customer like JetBlue that the average revenue per plane will go higher going forward as you think them taking advantage of the better capacity will be just a function of taking the advantage of your new technology and not necessary translating it to a higher revenue per plane?

So, what’s happened so far and we’ve been working on all these things is that average revenue per plane has gone up because all those factors. And that’s actually true for us not just on JetBlue. But I think that it’s just more engagement, more bandwidth per website, no matter what the mechanism is by which people access the internet, the trends are for bandwidth usage to grow. And so the net result of that so far has been growth in average revenue per plane. And I think that there is a way to do that. And what we want to do is we want to do it in a way that’s good for everybody, right, that’s good for the airline, that’s good for the passengers, good for the third party media companies and for us. But I think that’s the trend and that you will see even with your airtime pricing come down that consumption in passenger satisfaction is going to go up.

I think there is time for one more question.

And our next question comes from the line of Ric Prentiss from Raymond James. Your line is now open.

Thanks guys. I appreciate you squeezing me in. I’ve been outside at a conference. So, I apologize if some of the questions were asked. First one, you guys talked little bit about the installed time or the installed pace with American, how many days do they need to take it onto a maintenance schedule at American for you guys to do the installs?

I think you have got to ask American that. I mean working -- obviously we are working with them but I think they have got control of disclosure on amount of time they’ve in aircraft offline.

And I assume there is some seasonality to when they want to take somebody off as well. Can you help us to understand any kind of seasonality impact as far as what that pacing might look like?

Sure. We have got two things going with American, retrofit aircraft and that’s definitely effected by seasonality and they have new deliveries for [indiscernible] both of those going with them. So I think they are pretty anxious to step on, in fact they know, they stress that with me all the time. So, I think they are going to go about as fast as they can. But you are right, there is seasonality, certainly for certain aircraft types from certain routes..

The only other thing I want to add there is -- element of this is just an artifact of doing an install for a satellite antenna at all. I think for our particular install, I think our install is probably the most efficient in the industry, partly because we have fewer pieces of equipment, more of it is integrated. There is fewer cables. So, I think that while install rate’s little bit an issue -- it’s a fair question for the satellite as a whole. I think we are pretty favorably positioned in that respect with the airlines.

And then did you talk at all about the next phase of the JV with Eutelsat and then the initial phase and you talked little bit about the retail co and infra co but there is a possibility of expand that relationship is there an update on that?

No, the next phase would be the ViaSat-3 portion. And I think we are both aiming more for the end of the calendar year to have an update on that.

As far as timing for potential on a ViaSat-3C, is there any kind of timeframe as long as should we expecting go no go decision how you might proceed with it?

I think it likely will proceed but the timing again will be the end of the calendar year for us to have a further disclosure on that.

Makes sense. Okay, thanks for squeezing me in guys.

All right. Mark, that’s it.

Okay. So, lots of questions, lots of stuff to discuss. Thanks a lot everybody for joining us and I look forward to speaking you again next quarter.

Ladies and gentlemen, thank you for your participation in today's conference. This concludes the program and you may now disconnect. Everyone have a great day.