May 12, 2014 / 3:54 PM / in 4 years

UPDATE 2-Gogo revenue jumps as more users access in-flight Internet

* 1st-qtr rev $95.7 mln vs est $94 mln

* 1st-qtr adj loss/shr $0.20 vs est $0.25

* Shares rise as much as 10.6 pct (Adds details, updates shares)

By Soham Chatterjee

May 12 (Reuters) - Gogo Inc reported a higher-than-expected 35 percent jump in quarterly revenue, as more flyers used its in-flight wireless internet services, and brushed away concerns about rival services from AT&T Inc.

Shares of Gogo, which provides wi-fi in aeroplanes largely via mobile-network technology in the United States, rose nearly 11 percent on Monday morning.

The company’s stock lost a third of their value through Friday after telecom giant AT&T said late last month that it would launch a competing service.

Gogo, which is trying to shift to a faster satellite-based system, said its technology was ahead of the 4G LTE platform that AT&T proposed to use.

“Our next-generation solutions... will be faster and flying sooner than AT&T’s proposed solutions,” Gogo Chief Executive Michael Small said on a post-earnings conference call.

Analysts have said AT&T’s impact may be limited due to Gogo’s long-term contracts, regulatory hurdles for AT&T, high switching costs for airlines and the increasing demand for seamless in-flight connectivity.

Satellite-based wi-fi keeps flyers connected to the Internet across land and sea, while mobile networks - including 4G LTE - work only over land.

Gogo, which launched satellite connectivity on Delta Air Lines Inc’s international fleet in March, will be able to offer up to 70 megabits per second (mbps) speed on satellite-based systems.

The company also said it was on track to upgrade 800 of the 2,056 aircraft fitted with its wi-fi with newer technology, tripling connectivity to 10 mbps this year.

Gogo, which competes with satellite-based service providers such as ViaSat Inc, Row 44, Panasonic Avionics and OnAir, charges customers $16 per day to access its in-flight Wi-Fi. Monthly unlimited passes cost $59.95.

CEO Small said the company was confident of winning more contracts this year.

Gogo holds more than 80 percent market share in outfitting U.S. commercial and business aircraft with wi-fi.

The company, whose customers include American Airlines , Virgin America and Air Canada, recorded a 47 percent rise in revenue from its more profitable business aviation unit in the first quarter ended March 31.

Revenue from commercial aviation in North America rose 32 percent to $57.1 million as average monthly revenue per aircraft rose by a fifth.

The company reported an adjusted loss of 20 cents per share on revenue of $95.7 million.

Analysts on average had expected a loss of 25 cents per share on revenue of $94 million, according to Thomson Reuters I/B/E/S.

Gogo’s shares were up 9.5 percent at $13.06 on the Nasdaq in late morning on Monday after touching a high of $13.20. (Reporting by Soham Chatterjee; Editing by Joyjeet Das and Savio D’Souza)

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