Viasat, Inc. VSAT, a leading player in the satellite communications industry, has encountered an unexpected setback with its ViaSat-3 Americas satellite. The company revealed that an event during the reflector deployment likely had a material impact on the satellite’s performance. Viasat is currently working closely with the reflector’s manufacturer to determine the extent of the issue and explore potential remedial measures.
To mitigate the economic effects of this anomaly, Viasat is refining its contingency plans. These plans aim to minimize the impact on the company’s operations. One potential option is to redeploy satellites from Viasat’s extensive fleet to optimize global coverage. Another option under consideration is reallocating a subsequent ViaSat-3 class satellite to provide additional bandwidth for the Americas region. It is important to note that the initial service priority for ViaSat-3 Americas was to support the growth of Viasat’s North American fixed broadband business.
Despite the sudden setback, customers have not experienced any disruption in service as the coverage and capacity of the existing Viasat and Inmarsat constellations remain unaffected. Viasat, following its acquisition of Inmarsat, operates 12 Ka-band satellites in space, excluding ViaSat-3. Additionally, the company has eight more Ka-band satellites under construction.
As Viasat navigates this unexpected challenge, investors should monitor its progress in resolving the satellite anomaly. The successful implementation of the contingency plans will be key in minimizing the impact on its performance and ensuring continued growth in core business areas.
Nevertheless, the growing adoption of in-flight Wi-Fi services in commercial aircraft is proving conducive to its business growth. Viasat’s impressive bandwidth productivity sets it apart from conventional and lower-yield satellite providers that run on incumbent business models. The company has a competitive advantage in bandwidth economics, global coverage, flexibility and bandwidth allocation, which makes it believe that mobile broadband will act as a profit churner with a significant improvement in in-flight connectivity revenues.
The stock has gained 63.8% over the past year against the industry‘s decline of 7.6%.
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Viasat currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
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Juniper Networks Inc. JNPR, carrying a Zacks Rank #2, is a leading provider of networking solutions and communication devices. The company develops, designs and sells products that help to build network infrastructure used for services and applications based on single Internet protocol network worldwide. Juniper offers a broad range of routing, switching and security products.
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Disclaimer: This article has been written with the assistance of Generative AI. However, the author has reviewed, revised, supplemented, and rewritten parts of this content to ensure its originality and the precision of the incorporated information.
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