By Alwyn Scott
NEW YORK (Reuters) - In-flight internet provider Gogo Inc said on Wednesday it is building a faster version of its air-to-ground system for business and commercial aircraft that will ease a bandwidth bottleneck when it becomes available in 18 months.
The service will provide speeds of 100 megabits per second to an aircraft, about 10 times more than Gogo's existing system, Chief Operating Officer John Wade said in an interview.
Shares of Gogo were up 2.3 percent in afternoon trading to $12.64.
Based on Gogo's cellular telephone technology, the system uses unlicensed radio spectrum, beam-forming directional antennas and other improvements to increase speed, Chief Technology Officer Anand Chari said in the same interview.
Passengers will be able to stream to their own tablets or laptops. "You don't need a seatback system," Chari said.
The system builds on Gogo's existing network of 250 cellphone towers. Airlines that already use Gogo's air-to-ground system, including Delta Air Lines Inc (NYSE:DAL) , United Continental Holdings Inc and American Airlines Group Inc , will need to install a new modem box and additional antenna on each aircraft, a process that takes one day, Chari said.
Because of its relatively small size, the air-to-ground system is aimed at business aircraft, regional commercial planes and jetliners that will not travel much outside the United States or over larger bodies of water, Wade said.
Gogo has about 7,000 business and 2,500 commercial aircraft using the system.
Large aircraft that operate internationally and over oceans can achieve similar 100 mbps speeds with Gogo's satellite-based system using Ku band technology, known as 2Ku, Chari said. Gogo has orders to install 2KU on 1,200 aircraft.
Gogo's current air-to-ground system sometimes struggles to provide seamless service even for low-intensity applications such as email. In contrast, passengers will be able to stream video over the internet using either the Ku band or the enhanced air-to-ground systems, said Chari.
The enhanced air-to-ground service has not been formally offered to customers yet, Wade said, but airlines that have seen it were excited about the capability. Starting in 2018, Gogo expects airlines to install it on up to about 800 planes a year, the deployment rate for the existing service, Wade said.
Gogo's 2Ku satellite system, which uses providers such as Intelsat SA , SES SA and Eutelsat , will provide free Netflix (NASDAQ:NFLX) streaming on Aeromexico flights, Wade said.