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ViaSat & Eutelsat Close JV Deal, Boost Broadband Business
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ViaSat, Inc. (VSAT - Free Report) and communication satellites operator Eutelsat Communications have closed the previously announced deal to form a joint venture in a bid to strengthen their broadband business in Europe.
In Feb 2016, the decade-long partners had announced a joint-venture deal to integrate Eutelsat's European broadband business with ViaSat's broadband technology and Internet Service Provider (ISP) expertise. The collaboration will help fortify Eutelsat's wholesale broadband business and also enable it to foray into consumer retail service business.
The New Arrangement
Headquartered in Lausanne, Switzerland, this joint venture comprises two business entities, Wholesale Services and Retail Services. Wholesale Services – with 51% Eutelsat ownership – will offer mobility and broadband business to the newly formed retail services business and existing Eutelsat distributors. It will also own and operate the KA-SAT satellite. ViSat has 49% interest in the business for a consideration of €132.5 million.
The Retail Services business, on the other hand, which comprises 51% of ViaSat’s ownership and 49% of Eutelsat’s ownership, will offer retail broadband internet services in Europe and the Mediterranean region. In addition, the companies expressed interest in rolling out Enhanced service plans in select European countries from 2017.
Tie up to Facilitate Second ViaSat-3 Satellite Launch
For quite some time now, ViaSat has been working to launch three large KA-band satellites that can have 1 Terabit per second of throughput. This joint venture will enable ViaSat to launch the second ViaSat-3 satellite as its partner, Eutelsat, will bear 51% of the expenses. The second ViaSat-3 satellite, scheduled for launch in 2020, will cover Europe, the Middle East and Africa. Eutelsat has earmarked a payment of $331.5 million, out of the total cost of $650 million, for the launch of the second satellite.
Once complete, the ViaSat-3 platform will help form a global broadband network with sufficient capacity. This will offer consumers affordable, high-quality, high-speed Internet and video streaming services. This will offer ViaSat an unparalleled economics of scale and scope to strengthen its foothold in the emerging markets of South America, Africa, the Middle East and Western Asia.
Over the past three months, the company’s shares declined 2.8%, faring better than the Zacks categorized Wireless Equipment industry’s fall of 5.2%.
The momentous market traction of ViaSat-1 satellites, along with the recently launched ViaSat-2, and the upcoming ViaSat 3 satellites, will provide ViaSat a solid competitive edge over its peers, thereby bolstering growth. We believe this will drive the Zacks Rank #3 (Hold) company’s thriving Satellite Services business, which has turned out to be one of the strongest profit churners in recent times.
Stocks to Consider
Better-ranked stocks in the same space include Applied Materials, Inc. (AMAT - Free Report) , Science Applications International Corporation (SAIC - Free Report) and Ubiquiti Networks, Inc. . While Applied Materials sports a Zacks Rank #1 (Strong Buy), Science Applications and Ubiquiti Networks carry a Zacks Rank #2 (Buy).You can see the complete list of today’s Zacks #1 Rank stocks here.
With four back-to-back beats, Applied Materials has an average positive surprise of 3.9% for the trailing four quarters.
Science Applications International has a striking earnings surprise history for the trailing four quarters, having beaten estimates in each of them, for a remarkable average of 9.2%.
Ubiquiti Networks has managed to beat earnings estimates thrice over the trailing four quarters. It has an average positive surprise of 14.3%.
Zacks' Top 10 Stocks for 2017
In addition to the stocks discussed above, would you like to know about our 10 finest tickers for the entirety of 2017?
Who wouldn't? These 10 are painstakingly hand-picked from 4,400 companies covered by the Zacks Rank. They are our primary picks to buy and hold. Be among the very first to see them >>
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ViaSat & Eutelsat Close JV Deal, Boost Broadband Business
ViaSat, Inc. (VSAT - Free Report) and communication satellites operator Eutelsat Communications have closed the previously announced deal to form a joint venture in a bid to strengthen their broadband business in Europe.
In Feb 2016, the decade-long partners had announced a joint-venture deal to integrate Eutelsat's European broadband business with ViaSat's broadband technology and Internet Service Provider (ISP) expertise. The collaboration will help fortify Eutelsat's wholesale broadband business and also enable it to foray into consumer retail service business.
The New Arrangement
Headquartered in Lausanne, Switzerland, this joint venture comprises two business entities, Wholesale Services and Retail Services. Wholesale Services – with 51% Eutelsat ownership – will offer mobility and broadband business to the newly formed retail services business and existing Eutelsat distributors. It will also own and operate the KA-SAT satellite. ViSat has 49% interest in the business for a consideration of €132.5 million.
The Retail Services business, on the other hand, which comprises 51% of ViaSat’s ownership and 49% of Eutelsat’s ownership, will offer retail broadband internet services in Europe and the Mediterranean region. In addition, the companies expressed interest in rolling out Enhanced service plans in select European countries from 2017.
Tie up to Facilitate Second ViaSat-3 Satellite Launch
For quite some time now, ViaSat has been working to launch three large KA-band satellites that can have 1 Terabit per second of throughput. This joint venture will enable ViaSat to launch the second ViaSat-3 satellite as its partner, Eutelsat, will bear 51% of the expenses. The second ViaSat-3 satellite, scheduled for launch in 2020, will cover Europe, the Middle East and Africa. Eutelsat has earmarked a payment of $331.5 million, out of the total cost of $650 million, for the launch of the second satellite.
Once complete, the ViaSat-3 platform will help form a global broadband network with sufficient capacity. This will offer consumers affordable, high-quality, high-speed Internet and video streaming services. This will offer ViaSat an unparalleled economics of scale and scope to strengthen its foothold in the emerging markets of South America, Africa, the Middle East and Western Asia.
Over the past three months, the company’s shares declined 2.8%, faring better than the Zacks categorized Wireless Equipment industry’s fall of 5.2%.
The momentous market traction of ViaSat-1 satellites, along with the recently launched ViaSat-2, and the upcoming ViaSat 3 satellites, will provide ViaSat a solid competitive edge over its peers, thereby bolstering growth. We believe this will drive the Zacks Rank #3 (Hold) company’s thriving Satellite Services business, which has turned out to be one of the strongest profit churners in recent times.
Stocks to Consider
Better-ranked stocks in the same space include Applied Materials, Inc. (AMAT - Free Report) , Science Applications International Corporation (SAIC - Free Report) and Ubiquiti Networks, Inc. . While Applied Materials sports a Zacks Rank #1 (Strong Buy), Science Applications and Ubiquiti Networks carry a Zacks Rank #2 (Buy).You can see the complete list of today’s Zacks #1 Rank stocks here.
With four back-to-back beats, Applied Materials has an average positive surprise of 3.9% for the trailing four quarters.
Science Applications International has a striking earnings surprise history for the trailing four quarters, having beaten estimates in each of them, for a remarkable average of 9.2%.
Ubiquiti Networks has managed to beat earnings estimates thrice over the trailing four quarters. It has an average positive surprise of 14.3%.
Zacks' Top 10 Stocks for 2017
In addition to the stocks discussed above, would you like to know about our 10 finest tickers for the entirety of 2017?
Who wouldn't? These 10 are painstakingly hand-picked from 4,400 companies covered by the Zacks Rank. They are our primary picks to buy and hold. Be among the very first to see them >>