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Facebook (FB) Wants to Fly Drones Over Menlo Park Campus


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Per a recent filing with the Federal Communication Commission, Facebook Inc. (FB - Analyst Report) has sought permission to fly drones over its Menlo Park headquarters “to test potential new communications applications and equipment in a controlled, low-altitude airborne environment."

The social media giant has asked for permission to fly drones at a maximum altitude of 400 feet within a 5km radius from its headquarters between Oct 2016 and Apr 2017.

Facebook is making efforts to develop airborne/wireless technology that will help it deliver Internet services in the remotest parts of the world. Aquila, a solar powered aircraft with a wingspan greater than a Boeing 737 to beam Internet from the sky, is Facebook’s most ambitious project. In June this year, Aquila completed a successful flight in Yuma, AZ. Aquila was in flight for 96 minutes, way ahead of its target of 30 minutes. Analysts observe that Facebook’s current test involving drones is somewhat related to Aquila.

Apart from Aquila, at the F8 conference, Facebook said that it was working on ARIES (Antenna Radio Integration for Efficiency in Spectrum) and Terragraph, two of its ambitious Internet connectivity projects. With ARIES, Facebook is testing to bring speedier connectivity in rural areas by using antennas to provide faster Internet coverage on 2G spectrum while Terragraph will boost connectivity in congested urban areas by employing WiGig antennas.

Facebook is trying to boost its user base in the highly populated South East Asian region and the sub Saharan region. However, these regions are marred by lack of physical infrastructure, which limits Internet access. But with the rapid increase in mobile phone usage in the region, the use of mobile Internet has also picked up pace. This is in tune with Facebook’s growth strategy.

Facebook had earlier collaborated with France-based Eutelsat Communications to launch a satellite that would beam Internet in sub-Saharan African regions. Facebook however suffered a major setback when a SpaceX rocket exploded at its launch last month, destroying the AMOS-6 satellite. AMOS-6 would have been the first satellite of Facebook and Eutelsat to bring Internet access to Africa, the Middle East, and Europe. 

Facebook is also testing Express Wi-Fi and developing laser technology to move loads of data at superfast speed. We believe these initiatives will significantly drive Facebook’s user base in these regions in the long run.

At present, Facebook carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the broader tech space include NetEase, Inc. (NTES - Snapshot Report) , Intel Corporation (INTC - Analyst Report) and Jabil Circuit Inc. (JBL - Analyst Report) . All sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

The Zacks Consensus Estimate for NetEase surged 3.1% over the past 30 days for the current fiscal. Intel has seen estimates for the full year rise 4% over the past 30 days. For Jabil Circuit, estimates rose 4.9% in the last 60 days.

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