Welcome to ViaSat Fiscal Year 2015 Fourth Quarter Earnings Conference Call. Your host for today’s call is Mark Dankberg, Chairman and CEO. You may proceed, Mr. Dankberg.

Thanks. Good afternoon everybody and welcome to our earnings conference call for our fourth quarter of fiscal year 2015. I’m Mark Dankberg, Chairman and CEO. And I have here with us Shawn Duffy, our Chief Financial Officer; and Keven Lippert, General Counsel; and Rick Baldridge, our President and Chief Operating Officer is attending by phone. Before we start, Keven will provide our Safe Harbor disclosure.

Thanks Mark. As you know this discussion contains forward-looking statements. This is 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 SEC or from our website. That’s it. Back to you, Mark.

Okay, thanks. So we will be referring to slides that are available over the web. And I will start with some highlights and a top level business overview. And then Shawn will go over the consolidated and segment financial results. And I’ll give some additional details and color on each of our segments and then I’ll summarize our outlook and we can take questions. So, the headline for the fourth quarter and fiscal year ‘15 as a whole is certainly growth in adjusted EBITDA. That increased 55% and 56% in the fourth quarter and fiscal year year-over-year respectively. And we achieved that on a relatively modest year-over-year revenue growth of 6% in Q4 and 2% for the year. The numbers really reflect our continuing transformation to capture the value of our technologies by bringing services to market. In fiscal ‘15, we had pretty difficult year-over-year comparisons in product sales for two main reasons. We had declines in certain government product sales especially our Blue Force Tracking 2 system and a difficult comparison because of a bulge in product sales last year for our large national broadband network project in Australia. But strong growth in Satellite Services especially consumer but also in enterprise and government overcame those headwinds in revenue and they drove strong growth in adjusted EBITDA. Services made up a growing proportion of our total revenues and through steady operational improvements as well as leveraging the benefits of our bandwidth economics we increased the margins on those services’ businesses too. Shawn will go into more depth later, but for fiscal ‘15 we grew adjusted EBITDA by about 38% year-over-year, even excluding the non-recurring effects of Space settlement regarding the ViaSat-1 intellectual property. By now it should be clear that our growth rate is not so much constrained by aggregate…

Thanks Mark. Slide five shows revenue and adjusted EBITDA performance for the fourth quarter and fiscal year compared to the same period a year earlier. As to our revenue performance, Satellite Services continues to be the clear driver of overall revenue growth, offsetting declines in Government Systems and Commercial Networks for fiscal 2015. Our Satellite Services segment is being fueled from multiple dimensions both in overall sub base, strong increases in revenues earned per sub, as our Q4 ARPU reached over $54 and continued growth in broadband aviation revenues. The wind-down effects of two very large very successful programs drove the year-over-year top line reductions in our government and commercial segments, the BFT program completion last year in the government segment and the NBN Co program in our commercial segment which will continue to scale downward to completion in FY16. An important notable in our government segment was this record award year, pushing government backlog to $382 million, an increase of 36% year-over-year, which is a pretty strong metric, as we look outward to this market sector. Our adjusted EBITDA growth continues to be significant, both in the quarter and for the full year, closing out to $345 million a $123.6 million year-over-year increase. Strong top-line plus margin expansion, as we steadily improve unit profitability on our existing customer base drove the Satellite Services segment performance, as Mark mentioned earlier. Additional margin gains and reduced R&D in our government mobility area, plus contributions from our newly acquired managed Wi-Fi service business, NetNearU all-in contributed to our FY15 earnings growth, setting a new record for adjusted EBITDA performance. We talked about our top line revenue and adjusted EBITDA results on the previous slides. The next slide highlights some of the other major influences on reported net income and earnings per share.…

Thanks. So, the metrics for our consumer business are consistent with our balancing act for bandwidth supply and demand across our target consumer enterprise and government markets. The top left chart shows Satellite Services quarterly adjusted EBITDA has grown almost fivefold over the past 10 quarters and about 50% increase in consumer subscribers. And note that we haven’t increased our recurring basic service plan unit prices at all over this time period. We understand that to be competitive, unit bandwidth pricing should come down over time. We’ve grown EBITDA to scale effects, operational improvements including subscriber acquisition costs and network operations, churn reduction initiatives and increasing proportion of retail subscribers through value added services like VoIP and higher price but higher value service plans and by growing the enterprise services, especially aeronautical. And then over the past year we’ve made progress on some important aspects of the consumer business like better customer qualification criteria that help produce in voluntary churn, enhanced our retail distribution and fulfillment network, we’ve been testing the service plans in lower demand markets that help us frame the elasticity, demand and customer satisfaction through service plans that deliver more bandwidth in different forms and of course, we’ve continued our operational cost efficiency initiatives. So in general, gross and net add trends reflect seasonality and are moderating as the satellite goes but we’ve continued to grow ARPU and EBITDA at a faster rate while aiming to carefully balance market supply and demand effects with the needs of our end customers and our distribution partners. As I mentioned, we’re in some form of capacity allocation regime in over half the beings of ViaSat-1 and that proportion is likely to increase. Our basic strategy is to continue to balance the long-term interest of each of our stakeholders including investors…

[Operator Instructions]. Our first question comes from Rich Valera of Needham & Company. Your line is now open.

Mark just wanted to get your take on the Gulfstream announcement you made today. How incremental do you think that is to the historical relationship you’ve had with Gulfstream and if you could put any numbers around that if it is incremental? Thanks.

I wouldn’t put any numbers on it. But as we mentioned in the release, we’ve had a good long-term relationship with them and now we’re working with them directly. I think it’s a good endorsement for our technology and I think also it really paves the way for us to introduce Ka-band into that market, which is obviously one of our main objectives given the pending launch of VisSat-2.

And I don’t think you actually addressed it but it looks like churn bumped up a bit quarter over quarter. Can you talk about what maybe drove that bump in churn and how we should think about churn as we look into this fiscal year?

Churn, there was incremental churn in the quarter. And the main thing is we don’t think of churn as a single monolithic thing across all of the subscriber base. It tends to -- it is specific to the different distribution channels and the attributes of its subscriber that come in those channels in different points and time. And in this quarter, we had through one of our channels sort of a big cohort of subscribers that went through kind of a two-year anniversary of their initial subscription plans and had higher churn rate among that cohort than others and that’s what move into overall churn increase for the quarter.

So, when we’re looking for the balance of the year, you think we can be back in the kind of 2.4 to 2.5 level that would been seeing recently?

I think it’s a little over 2.5.

So, a little around 2.5ish?

Yes. It can be little higher than that; I think it’s more like 2.6 to 2.7, somewhere in that range. I think we’re sort of in that range.

I mean you were about 2.7 I think this most recent quarter, I thought quarter before that you were…

2.6.

So that’s 20 bps lower.

Okay, yes.

So, you think more like the most recent quarter or the one before or somewhere in between?

I think between probably a good metric.

And when you gave the guidance for I guess sort of flattish net subs in the first quarter and then 10 to 15 in the balance of the year. I’m just wondering how you think about the gross sub adds as you work through the year. And as you noted you know the sort of capacity issues becoming – we think to some degree a bit of an increasing headwind as time goes on but you seem to feel reasonably comfortable like you can keep adding, I think roughly the same number of gross sub adds. So just wondered, if you could talk through those dynamics a bit; how much of that maybe is using more of the underutilized beams, any comment?

So, there is number of factors involved. Some of it’s using the underutilized beams. And one thing is that we’ve certainly become -- because we’re capacity constrained, we’ve been investing more money and we are call sort harvesting and grooming that is capturing sort of pieces of unused bandwidth by reallocating some of the bandwidth across our fleet. And that frees up some bandwidth that gives us some growth. The other thing is we’ve invested in analytics and metrics. And the way we can drive call volume and how we can covert that call volume into subscribers. So, we’ve talked about over the last few quarters. I think we’re reducing our cost for those who are improving our ability to do that. In some sense that’s a little bit of a balance against the ceilings that we’re running into. I think those are most of the factors and that give us confidence that we’ll be able to get to those levels. I think we’ve done, we feel like we’ve been able to understand and forecast sort of the effects of the different distribution channels. Again, it’s not a monolithic -- there is different characteristics for each of the channels and this represents sort of that balance of what we expect to evolve in the aggregate.

And just one more for Shawn, I just wanted to try to understand the tax situation for fiscal ‘16. So I know at one point you said it is essentially you’re expecting I think a $0.20 hit year-over-year, assuming the R&D tax credit doesn’t get reinstated. Is that the main reason for the higher tax expectations this year and is there a rate you could associate with your kind of a pro forma tax rate you could give us to model?

Probably a good what we’ve kind of talked in the past is looking at the statutory rates, maybe somewhere like 37%, 38% and then that’s probably a good target for next year, just kind of taking out the R&D credit benefits.

And then if you got that obviously whatever time you retroactively apply to whatever for the year so…?

Yes, so we have one credit that would be coming from this quarter; if it comes in the place, it could fall into next year as well.

Our next question comes from Matt Robison of Wunderlich. Your line is now open.

I wanted to talk a little bit about ViaSat-2 and the launch plans there. We’re still talking about late summer ‘16 and using the Falcon Heavy vehicle, is that right?

Yes.

Is there -- I looked at something on the web; I don’t know how current it is. It looks like you guys might be the first flight after the Air Force for Falcon Heavy, is that right because it looks like you got in there in the schedule ahead Inmarsat, right?

So I think we’ll be -- depending on how things go the third or fourth flight of the Falcon Heavy. And that includes an Air Force flight and the Inmarsat flight. I don’t think Inmarsat has a heavy but Inmarsat does.

I guess I was looking at some older information. So when should we get an indication of how that launch vehicle is making headway according to schedule, do you think?

I follow SpaceX’s progress in the news. We are as part of our agreement with SpaceX, we’re allowed to participate in design reviews and status, sort of certification milestones along the way. And so, we have pretty current information and if we believe that that moves materially, we will disclose it as well.

Do you have a plan B in place at this point?

Yes, I would say we’re always figuring out something assuming that that schedule stretches unreasonably long. Right now, we don’t expect that but we’ll have some contingency plan for that.

As far as -- is that really the principal calendar item or is there -- or we should be also be considering the spacecraft manufacturing side of it at this point?

I think that satellite manufacturing has gone pretty well. I did mention the construction is going to be complete this summer; I think that’s pretty predictable. You always go into integration and test. We think that given the visibility we’ve had into the way that subsystems have come together, we don’t anticipate big delays there. It’s possible, there will be some. I think that probably right now people ought to be a little more focused just on the launch schedule.

Okay, so basically you’ll have about -- you’ll have a better part of the year integration and test time and then transport time I guess?

Yes, that’s less than a year, but yes in that range.

And so did you mention that part of your churn was attributed to folks coming off the contracts to your contracts?

Yes, that’s one of the -- for a cohort of subscribers through a particular channel, there was a bulge of that. And the churn rate for those particular subscribers was a little higher and that drove weighted churn for the quarter.

And what drove the ARPU so high?

It’s the same things we’ve been talking about for the last couple of years.

Just qualifying customers better and fine-tuning, and that sort of thing, like intuition?

Well, the big things are -- again it’s greater increase in the proportion of retail subscribers; it’s higher value; higher priced plans; value added services like VoIP. Those are the biggest contributors to ARPU.

So in event that popularity streaming is in a way driving your ARPU as well as stressing the capacity?

One of the things and we’ve talked about this and we think this is a good factor going forward is that clearly especially people who can’t get 12 megabits a second which is where right now, really are interested in streaming. And we’ve brought plans to market that had either virtually on caps usage or much higher caps that certainly drove demand and that’s helped secure our ARPU up.

How big of a component of the growth that freedom plan at this point?

We are not going to break that but I think I would say that that freedom -- this is one of the ways we characterized that a couple of quarters ago is what we’re doing is we’re kind of brining our best plans to our worst markets, so they are very popular and you get a rep [ph] there but those are ours, just smaller spaces to work from. What we really want to do is bring our best plans to biggest markets. And that’s sort of what we’re aiming to do at ViaSat-2. But for now, we get a sense of sort of elasticity demand, how best the price and what the usage will be and how to define the plans to sort of get the best value out of them.

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

You talked about further increases in R&D to bring ViaSat-3 class satellites to fruition. So, when you would be looking to choose a ViaSat-3 billed partner or set some kind of a schedule for a ViaSat-3 class satellite?

That’s something we’re really focused on because right now the performance of that class of satellite is really attractive. So what we’re doing, probably over the next couple of quarters is putting more into R&D and trying to come to kind of a decision point as to when we think we could plan for that cost satellite. We would like to see that that would be kind of our next big satellite, our next major satellite acquisition. And we are just not in a point yet to say as part of the reason we’re doing all of this R&D but I think over the next couple of quarters, we will be able to give a better timeline for that.

And is it fair to say that it’s looking like a ViaSat-3 class satellite will likely cost less to build than ViaSat-2 and maybe in the shorter time frame as well?

So ViaSat-2 supply has gone pretty well and about the schedule, I have to put it for the first one. The first, basically there we talked in the past about a couple of things that we’re trying to do. One thing that makes the lead times of satellites difficult especially satellites that as capable as the ones that we’re doing and have these great bandwidth economics and coverage and flexibility characteristics is that they’re really tailored to specific orbital spots and geographic coverage. And one of the ways to break that one thing you’d like to do is break that dependency and that allow you to literally come up with satellites on a much shorter demand time schedule. So, we think that the ViaSat-3 technical approach allows that. That’s not something that you would necessarily see with the first one but you would certainly see with subsequent ones. And some of those same features have helped drive down cost pretty substantially too. I think for the first one, we might see cost that -- cost and schedule that are more like ViaSat-2 but capacity, flexibility that’s a lot greater and bandwidth economics that are lot more attractive.

Just a couple of more, if you don’t mind. You talked about mainstream media market expansion. We also know, you’ve been investing heavily in distribution of content across networks. So, can you just elaborate more on what you might have in mind there?

So, basically the main thing we would like to achieve and I think this is what broadband customers want is they want -- people really like streaming media. And you are seeing that sort of there is a video on demand component which is like Netflix but then there is also a live video on demand, call a live video component which would be like say Sling TV but it’s also been around in the form of Major League Baseball; it’s a live event, that streamed. And there is going to be more streaming. And so what we think is that the distribution things that were doing, good for customers; good for users; and good for the media companies as well. And we would like to see those things be embraced by media partners. And one of the very cool things is that when you got all this people trapped on airlines with their mobile devices and they would like to use rights they already have in airplanes just like they do on the ground, I think that’s a really -- and just being an intriguing market for these media companies. And it requires I’d say some technical interventions which are the kinds of things that we’re doing. So that’s basically what I’m referring to is getting a little bit of the attention of the cooperation of the media companies to help us do that job better to get there faster to do it seamlessly with across a lot of different devices and players and media formats. Those are the kind of things that we need to do and we think that this Amazon one is a fabulous start. And I think we’re optimistic that we’ll see more media companies that want to present their media live to airplane users and that hopefully I think JetBlue and we will be kind of first to do that.

If I am Amazon subscriber, who is to tell me I can’t watch House of Cards on JetBlue. But anyway, the final question relates to terminal. Can you talk about what might be some major differences in your envisioned VisSat-2 residential terminals and how that might affect subscriber acquisition cost?

Not many things; I’d say now one of the things we’re trying to do is make it easier to distribute, install terminals, reduce subscriber acquisition costs, maybe improve the ability of subscribers to do things themselves to install them and adjust them themselves, certainly keep them in better performing conditions. Those things improve subscriber satisfaction. So, we’re looking at a bunch of technologies that can help us do that. And some of them are pretty mundane; some of them are very advanced. I think those can include things lie flat panel antennas and simpler smaller parabolic reflectors and simpler ways to point main things. We’re looking at a range of things. I think it’s one of the areas that we’re investing in; it’s one of things that can help speed the adoption of services on VisSat-2. We’ll make more announcements on that as we get closer to it.

Our next question comes from line of Andrew Pitoli [ph] from Wells Fargo. Your line is now open.

I just had a one question on the guidance. Does the $360 million include the 6.9 quarterly litigation settlement revenue?

Yes, it does.

And then Mark, on the JetBlue deal that you announced with Amazon, it’s obviously highly sensitive but when we’re thinking about modeling this business, you’re obviously going to be delivering a lot more bandwidth to them. How can we think about at a really high level, your revenue per plain; how it increases because of this deal or does it not increase?

So, one thing, I think all of us I think is that more passengers will use the in-flight Wi-Fi, they’ll use it more. And that will drive bandwidth consumption which will drive our revenue. How much that happens and how JetBlue -- and really announcement was between JetBlue and Amazon; we’re involved because it uses our service and we’re the sort of the engine behind it. But how JetBlue and Amazon aimed to sort of support back and how they drive value from it, that’s really between them. And I think that will turn out to be sort of the limiting factor on bandwidth growth, if there is any limit. I think so far what we’ve found is that more engagement has been -- JetBlue has said; I don’t want to speak for JetBlue but they said that think Wi-Fi is a contributor; they like the fact that it’s free; they’re trying to get more passengers engaged. And I think this has happened even though passengers have continued to use more bandwidth. So, it would be a little surprise that the fact that it drivers a lot of people to use a lot of bandwidth is a bad thing but we’ll have to see and it’s hard for us to make projections about what that will mean for us. We’ll have to see as they introduce it and roll it out and promote it.

And the 519 terminals that you reported as hasn’t been shift to date, as my memory recalls, it seems to be more than the combined JetBlue United EL Al that you were expecting. I mean are you shipping to other customers in this number or are there some business jet numbers included here or my recollection incorrect?

You’re right and it includes some numbers and I’d say probably low 10s of terminals that are going on airlines where we are not the service provider. For instance we’ve worked with LiveTV TELUS and they have some agreements where they’re using our network -- using satellites with our network on them and they’re using our satellite terminals. So, we’re not initially a service provider from them. We think at some point they could engage us in that roll but for some, few 10s of terminal we’re not necessarily a service provider.

I guess one last question from me Mark. You made a comment at an investor conference last week that ViaSat might sort of -- particularly in developing markets increasingly integrate with wireless with what you do. And I was wondering if you could expand on that. What sort of wireless technologies are you working on and how could we see you use that in the field?

The U.S market is a great market and Western Europe is kind of the same way and that we’ve got a big addressable market and people have their own broadband service at home and they pay tens of dollars a month for that service. There are lots of emerging markets; you probably don’t have that same ability to pay. And wireless distribution or Wi-Fi distribution is likely a good way to reach out to more people with lower subscriber acquisition costs and that presents both opportunities and challenges. And so that’s one of the reasons that we acquired NetNearU which is a very good, very, very good Wi-Fi distribution company. And they administer literally millions of Wi-Fi hot spots. We provide pay per use Wi-Fi services in a number of locations, not necessarily satellite but that’s fine because that’s great experience and Wi-Fi distribution. And more and more as we can bring these really advanced high capacity wireless services to things like airlines that’s our face to passengers and users is through NetNearU’s that now we’ve renamed as ViaSat Wireless as our face to those devices. Especially again in lot of emerging markets you’re likely to see many more users using mobile devices such as smartphones and tablets compared to PCs like to do in the U.S. So we want to be a leader in that environment. And that’s the dominant mode that we see Wi-Fi; it’s unlicensed; it’s easy to proliferate and there is often interesting business models that we think we can develop around it and that’s what we’re working on.

So maybe satellite backhaul to a Wi-Fi access point I think?

Yes, that’s an example. I mean that’s sort of exactly sort of what you on an airplane and you’ll see in other environments as well.

Thank you very much.

Just to clarify one of Andrew’s questions there, just go back to when we announced the settlement and one of the reasons why we took just to accelerate some of the R&D spending so the issue of the recurring royalty being in our EBITDA, one of the things we said was we’re going to spend a percentage of that on accelerating R&D to try to create value. So, that’s what we think more and [indiscernible] could have been in the future. So I just wanted to clarify that.

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

Rick, you just previewed my question which is you did mention increased R&D spending. Can you give us an order of magnitude or percentage ‘16 over ‘15?

This is Shawn and I can probably set that up to you. So if you kind of look at FY14 spend, so we thought as we went into ‘15 it was a little bit less with some of it kind of pushed out into ‘16. So probably looking at FY14, maybe increasing it by 5% to 10%, based on that might be a good range.

Okay, and…

I think it’s hard to say that here is how much that increased because of that because you got other things look for. And so the idea though is that we accelerate this settlement and it would give us the ability to create more value for our shareholders by investing that money in R&D advances to hang on to it right now.

Fair enough. I think just because you called it out I just wanted to make sure I wasn’t -- you were planning a 50% increase or something like that we were modeling correctly. Shawn, do you have the NetNearU revenue contribution from the fourth quarter?

We’re not giving that out separately you guys, but they are doing really well and they definitely made a meaningful mark into the margins for the quarter.

And can you also perhaps give us a little bit of a walk through in terms of your fiscal ‘16 EBITDA projection. Just on a segment by segment basis what should we expect either on a percentage or dollar basis, how the three segments played out, which ones are growing flat or down?

I think I can give you kind of directionally. So Mark talked about and I talked about in the context of the government segment the strong backlog base going into the year. And we also talked about in ‘15 that we had a year-over-year down-take in revenues but had a really good margin improvement due to the service base growing. If you take that in consideration of a growing backlog going into ‘16, and I think that we’ll see the government in the government space grow. From commercial EBITDA, just as Rick and I both, and Mark touched on is that’s the segment that we make the investments in. So as well as add on to that the down take in NBN as we start to wrap that up, we’ll see a little bit I think of year-over-year transition in that segment. And then the Satellite Services is just going to continue to grow strongly.

We also -- let me add to that, it’s Rick again. We’re also increasing our R&D investments in our government segment as well. So I don’t think you’re going to see EBITDA grow quite as fast as revenue in that segment this year.

And where are those investments you set on the aviation side?

I think it’s cyber security, aviation, our global mobile piece of that business, both of those were [indiscernible] investments.

Also on aviation, can you confirm, are you rolling now out in addition to JetBlue and United in those numbers that you provided?

They are not in there yet, because that’s not the point yet but they are in the back log.

And when do you think that program will kick off?

We’ve gone through aircraft type certification which is probably the long pole on the tent. So that could be probably next calendar year before we see that in service somewhere around end of this calendar year to next calendar year.

And EUROSAT in their last conference call mentioned that they’re also seeing some capacity constraints in serving regions. Does that in any way limit your ability to offer an aviation service in Europe? I know here in the U.S. you obviously can make the choice to reserve a certain percentage of your capacity specific for aviation but is it fair to assume that EUROSAT is doing the same for you in Europe?

So, we won’t make commitments to any of our customers that we don’t fill are back stuff by EUROSAT and there were the issues. So, we’re jointly coming up with the phase that we can to airline customers service that they will like and that we can fulfill. And I think EUROSAT is very interesting in growing that market with us, so looks promising.

And final question, a last aviation one. The Gulfstream win is on your sort of legacy Ku-band, the under service. Can you talk about how you see that service fitting in to the holistic global picture as you deploy ViaSat-2 and ViaSat-3 and partner with other satellite operators? Does that become an integral piece of your sort of Ka, Ku strategy or is it dependent upon Yonder or other providers in order to provide that Ku-band back up?

So, the way we look at it is that the bandwidth economics, the way you can project to an end user the capabilities of in-flight Wi-Fi system are really dominated by the economics of the satellite system itself, not the intend or that’s really a very second order issue. When you are increasing bandwidth efficiencies by factor of 10 or 100 on a satellite, the fact that you’re going to make a satellite, maintain a 40% or 80% better isn’t really the driving factor. So basically what we’ve done is come up with a set of antenna products where we have Ku only, antennas, we have Ka only antennas and we have hybrid Ka, Ku. So depending on the antennas that our customers choose, we can provide them a service that’s the best available in any given geographic area using with access to the resources that the antennas can support. So in some cases, though we have agreements to use for instance Inmarsat that Ka-band we’ve been doing work with Inmarsat Wi-Fi in some of the areas were that’s the best available satellite in the areas where we have ViaSat-1, we use that. Areas where we can use EUROSAT, we’ll use that, whatever the best available one is. In general kind of the high end of Kas would be way-way better then the high end of Ku. The high end of Ku maybe a little better than the low end of Ka, depending on the specific satellites and there is some sort of overlap in there. Some cases we’ll draw on Ku; in some cases we’ll draw on Ka. It’s going to really be dependent on the geographies where airplanes or mobile terminals do out where they spend most of their time. And we want to be able to use take advantage of the best available resources. And so far, most satellite operators to the extent their bandwidth available, they are fine with selling us bandwidth to use for our customers in their coverage areas. Does that answer your question?

Yes, it does. And I guess just to clarify, does that mean you would want to own and lease the transponders or situations where it just makes sense to buy a third-party through someone else on a contracted basis.

Yes. So, what we’ve done so far is we try to do a good job of matching our customer demands, what we have demand for with what we will go out and put this in the market. And we don’t feel like we need to go out and speculate and acquire the large amounts of bandwidth the it advance on multiyear contracts to really get the bandwidth price because all the bandwidth pricing that we can get is much, much higher than the pricing we could make in the region that we provide coverage for where our Ka partners are. So that’s really our source of competitive advantage; it’s not really speculating or making long advanced purchases in bandwidth.

Thank you. And that’s our final question. That concludes our call.

Thanks a lot everybody. I appreciate your time and look forward to talking to you next quarter.