Was Viasat‘s recent deal to secure $175mm in new capital just a matter of convenient timing? Or is there a specific plan for the cash? Not only was it a strategic investment by the partners, but the most recent quarterly earnings highlighted plans for “potential strategic growth opportunities and intend to pursue economically appealing ones, including evaluating success-based investments aligned with attractive global expansion.”
The inflight connectivity (IFC) segment presents at least one key opportunity on that front.
During the Q&A period of the quarterly earnings call this morning CEO Mark Dankberg highlighted the company’s track record for strategic investments, describing them as “tuck-in type things that help us with specific elements of technology or in specific market segments or in specific geographic areas.” He was also clear to name all the company’s segments – defense, broadband, and aerospace – as potential winners of an investment.
On the broadband front Latin America is poised for expansion, but Viasat was more keen on the relationship with Intercorp than the specific funding to realize that potential, “It is a little less that we needed the funding to do it and more that we really value the strategic relationship and the skills and the resources Intercorp brings to those markets.”
Pressed further on the inflight connectivity segment as an option, Dankberg was slightly more reserved as to the value of such a deal. He notes that the Viasat IFC value proposition differs from some of the competitors, both in terms of the hardware and the overall capacity, “Using the terminals that are on a lot of the planes that some of the competitors have, there’s just not the space segment resources available to be able to fulfill that value proposition.”
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As an alternative, Dankberg called attention to “opportunities that present maybe some unique and new value propositions for us that we’re working on” as a means to growth in the IFC segment. He pointed out the company’s investment and progress in “building lower cost, lower profile antennas that are more agile and will bring not only all of the Ka-band global satellites in, but will also bring in some of these non geosynchronous satellites as well.”
That sort of hybrid network connectivity has been established with existing hardware from multiple vendors. Viasat believes its next generation of terminals will enable even better integration of non-geosynchronous satellites.
And, of course, it is important to remember that there’s no rush to spend the cash immediately if a smart deal doesn’t present.
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