Viasat (NASDAQ: VSAT) shares gained Wednesday, climbing more than 1% after the company announced a partnership with Microsoft (NASDAQ: MSFT) to improve internet connectivity in Africa and “underserved communities globally.”
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Microsoft said in a statement that new collaboration through the Microsoft Airband Initiative will boost internet availability for five million people across Africa and five million people around the world by the end of 2025.
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Viasat is the first satellite partner to work with Microsoft’s Airband Initiative, with the companies working together to further Airband’s work in countries such as Nigeria, the Democratic Republic of the Congo, Mexico, Guatemala, and the United States. In addition, they will prioritize expanding the program to Angola, Egypt, and Senegal.
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“Through our Airband Initiative, we will extend high-speed internet access to 100 million people on the continent of Africa and to a quarter of a billion people living in unserved and underserved areas across the world by 2025,” commented Microsoft’s vice president of Technology and Corporate Responsibility, Teresa Hutson. “Working with Viasat, we will use satellite to reach remote areas that previously have had few, if any, options for conventional connectivity.”
Analyst Ratings
In November, Raymond James analyst Ric Prentiss downgraded Viasat to Market Perform from Outperform.
The analyst told investors in a note that he is still optimistic about the Viasat-3 launches leading to subscriber additions continuing in the US as well as additional markets opened up worldwide, but believes the catalysts are pushed out slightly, with the first satellite now launching in early CY23 compared to late 2022.
While Prentiss said competition from SpaceX Starlink or fixed wireless broadband will not be catastrophic to Viasat’s long-term growth story, he sees it impacting customer growth on the margins.
Overall, out of four analysts, one has a Buy rating on Viasat, while three have Hold ratings on the stock, with the average price target at $40.33 per share.
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