Avanti Communications Group… Financially Speaking + Migration Moves…

[SatNews] Arbitration is concluded and full commercial services have commenced…

Avanti Communications Group plc (LSE: AVN) has been successful in its claim against Space Exploration Technologies Corporation ruled upon under binding arbitration by the American Arbitration Association in New York. Avanti was awarded the full amount of refund it claimed under the contract, being $7,566,013 and was also awarded interest from the date of the claim.

Full commercial service on HYLAS 1 successfully commenced on April 4th. The process of migrating the base of approximately 5,000 Avanti end users currently using leased Ku-band capacity onto HYLAS 1 has proceeded to plan, with 10 percent already migrated. Several of the Company’s Service Providers also have similar bases of end user customers who are currently using interim leased Ku-band capacity. Avanti is also assisting these service providers in the migration of their end users to HYLAS 1, which amounts in aggregate to over 20,000 end users.

Avanti also confirmed that successful service launch has met contractual service parameters with all of its customers, confirmed their requirements for modem deliveries from the supplier, and updated bandwidth demand. Based on these results, it is an appropriate time to update the market on sales progress. In 2010, Avanti specified that it was confident of exceeding a target for pre-sales signed by service launch of 25 percent. This target metric was useful in demonstrating confidence in the ability to pre-sell meaningful amounts of capacity before launch. Avanti can confirm that, at service launch, having confirmed contracts and orders, the peak utilization rate under HYLAS 1 aggregate contracts is 35.1 percent, which comfortably exceeding the 25 percent target set pre-launch. Henceforth, Avanti will regularly report the industry standard backlog metric.

The backlog statistics are now 139.0m pounds for HYLAS 1, 28.4m pounds for HYLAS 2. Avanti also notes a 113.4m pounds option for HYLAS 2 capacity, which is subject to a significant option fee. Approximately 52 percent of backlog revenues relates to enterprise and military applications and customers (not including the HYLAS 2 option), with the balance relating to SME and Consumer broadband. Avanti expects backhaul business to soon become a significant percentage of backlog. Avanti is also reporting that the increased credibility generated from successful service launch has resulted in an increase to the pipeline, which now stands at £427.2m pounds.