Gogo is ready to start rolling out its Next Gen Air To Ground (ATG) next year, which should give it a significant competitive advantage in both performance and cost, according to CEO Michael Small.
Gogo provided an update to its Next Gen ATG during its second-quarter conference call, where it reported a net loss of $44.2 million, in part due to costs associated with the development of the next-gen solution.
“We’re very excited about Next Gen ATG,” Small said. The company has received the prototype equipment and it’s testing it in the lab and achieving 130 Mbps or higher. He reiterated plans to have it flying on planes in 2018. “All the components are coming together,” he said. “It’s performing great.”
Gogo is also deploying satellite-based 2Ku service and it’s now on nearly 250 aircraft across nine airlines around the world. Gogo announced the next-gen ATG network last fall, saying it will be a good alternative for smaller planes and provide a similar experience for business aviation and commercial flights where Gogo’s 2Ku antenna isn't a fit.
Next Gen ATG uses unlicensed spectrum, a proprietary modem and a new beam-forming antenna to produce peak network speeds of more than 100 Mbps. The company will be leveraging the 250-plus towers that its first-generation North America network uses.
Aircraft previously outfitted with one of Gogo's earlier generation air-to-ground technologies will need to be outfitted with the new modem and blade antenna to take advantage of the new service.
Gogo executives said during Tuesday’s conference call that deploying the Next Gen ATG will involve an overnight installation on a plane, which its airline partners will appreciate, while the 2Ku installations are now down to less than two days, which is a significant achievement.
The 2Ku installations will accelerate after Labor Day. The company expects to equip up to 550 aircraft with 2Ku during 2017 and increase the number of installations in 2018.
Gogo has taken a beating in the past over shoddy service—so the improvements in technology should go a long way toward fixing that. The 2Ku technology also promises speeds of 100 Mbps or more compared to the old tech’s 25 Mbps—and customers were unable to stream music or video with the previous generation.
Interestingly, Gogo announced a partnership in 2014 with T-Mobile to deliver free in-flight texting and voicemail to T-Mobile customers on all Gogo-equipped U.S. airline aircraft. That’s an example of a third party paying for services for passengers, Small said. Gogo often refers to Japan Airlines as being an example of an airline paying Gogo as compared to the traditional model of the passenger paying. “We do expect future deals like that,” Small said.
Basically what permits those deals is having the bandwidth to take on the additional volume, he said, and as 2Ku comes into the market, “we’ll do that.”
Some airlines, like Japan Airlines, may pay for 100% connectivity, while other airlines may do a lesser amount, but there likely will be a range on what airlines and third parties decide to do.