Gogo Business Aviation (NASDAQ: GOGO) today announced a delay in its Gogo 5G system launch, due to a design error in a non-5G component of its chip, which was designed by a third-party subcontractor of its 5G solution provider.
"We are disappointed in this delay, but remain confident that Gogo 5G will deliver better performance and better value than competitive ATG or GEO satellite solutions," said Sergio Aguirre, Gogo's president and chief operating officer.
Gogo is collaborating with its suppliers on more definitive plans, but expects to deliver Gogo 5G in approximately mid-year 2024, and in keeping with its culture of transparency with customers and partners, will provide periodic updates as warranted.
Gogo has already achieved significant milestones in the launch of Gogo 5G, including the launch of the Gogo 5G antenna and the 150-site ground-based network in the United States and Canada. Gogo continues to take 5G orders and is making headway with major OEMs to make 5G a line-fit option. Additionally, customers can pre-provision today with 5G antennas and harnesses, which will allow operators to quickly install the 5G box once the chip is available.
Gogo 5G is expected to provide ~25 Mbps on average, with peak speeds in the 75-80 Mbps range, outperforming any competitive geosynchronous (GEO) satellite or air-to-ground (ATG) solution. It has been designed with the goal of delivering high throughput with very low latency, addressing the increased demand in data-heavy services and applications in use today, such as video conferencing, cloud computing and social media, as well as emerging technologies in the future.
Despite the delay, Gogo remains confident in its ability to bring to market the first 5G network exclusively for business aviation. Gogo's suppliers have so far successfully conducted extensive testing of the 5G components of the chip, and the design error is not in the 5G block of the chip.
Gogo expects the project to remain on budget, but that the delay is anticipated to reduce 2023 revenue by approximately $7 million and defer approximately $13 million in operating and capital expense from 2023 into 2024. Gogo plans to share more details during its second quarter 2023 earnings call on August 7, 2023.
About Gogo
Gogo is the world's largest provider of broadband connectivity services for the business aviation market. We offer a customizable suite of smart cabin systems for highly integrated connectivity, inflight entertainment and voice solutions. Gogo's products and services are installed on thousands of business aircraft of all sizes and mission types from turboprops to the largest global jets, and are utilized by the largest fractional ownership operators, charter operators, corporate flight departments and individuals.