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[Satellite TODAY Insider 04-27-12] ViaSat’s $70 million contract with the King Abdul-aziz City for Science and Technology (KACST) organization in Saudi Arabia, announced April 25, represents a potential boost to ViaSat’s Commercial Networks business segment and an important endorsement in ViaSat’s battle to win upcoming infrastructure contracts, Raymond James Analyst Chris Quilty said in an April 26 research note.
The contract includes the procurement of ViaSat gateways, hubs, network operation facilities, maintenance and support fees, and an undisclosed number of end-user terminals.
Quilty told Satellite TODAY Insider that while the contract would most likely provide minimal profitability for ViaSat and not cause its estimates to be raised for the company’s long-term position, he believes the deal could provide some near-term upside to the company’s Commercial Networks business segment.
“We are currently forecasting 17 percent year-over-year growth for ViaSat Commercial Networks to $247 million for the full year of 2013. Furthermore, higher production volumes could aide segment operating performance, which has generated a loss for seven consecutive quarters,” said Quilty.
The Saudi broadband services supported by the contract will be hosted over the Arabsat-5C satellite. The high-power satellite, owned by Riyadh-based Arabsat and built in a collaborative project between Astrium and Thales, was launched in September 2011. The spacecraft features a traditional payload of 26 C-band transponders, along with 12 Ka-band transponders reserved for broadband services.
ViaSat said its target markets include consumer, commercial and government users across of variety of fixed and mobile applications.
Quilty added that the contract win also represents an important endorsement for ViaSat’s SurfBeam technology platform, which has already been selected by customers in Canada, Europe and the United Arab Emirates.
“ViaSat is currently competing for a number of large Ka-band infrastructure contracts that are expected to be awarded during the next 12 to 18 months from Telnor, Yahsat, ictQatar, and the Australian National Broadband Network Co.,” said Quilty. “This deal is an endorsement that should help ViaSat secure that business.”
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