Moreover, ViaSat is also receiving orders for Exede from the U.S. military for Blue Force Tracking and Joint Tactical radio systems. The U.S. military uses these radio systems in field operations. Due to the increasing number of orders, the gross subscriber addition for Exede is expected to increase 26.5% year-over-year to reach 374,033 subscribers in fiscal year 2014.
Increasing inflight services
ViaSat is set to launch in-flight Wi-Fi services with JetBlue Airways Corporation (NASDAQ:JBLU) within the next few months. JetBlue Airways Corporation (NASDAQ:JBLU) entered the deal with ViaSat to enhance its passenger’s experience during their air journey with faster in-flight Wi-Fi services. The enhanced in-flight facilities will attract more passengers to JetBlue Airways Corporation (NASDAQ:JBLU). Additionally, this will be highly successful for ViaSat, as it will provide 7.1% market share in revenue passenger miles to ViaSat. This market share should increase quickly as it will begin providing in-flight Wi-Fi services to United Continental Holdings soon after JetBlue Airways Corporation (NASDAQ:JBLU). This service will be available on all the aircraft of JetBlue Airways Corporation (NASDAQ:JBLU) by the end of 2015. In the beginning, the company will provide this service free of cost and eventually at lower prices.
Currently, Gogo provides in-flight Wi-Fi on the majority of domestic flights. However, Gogo provides relatively slower bandwidth speed than ViaSat’s inflight Wi-Fi facility. Gogo provides speed of 66 kilobits per second, compared to the five megabits per second speed provided by ViaSat. ViaSat will take a few years to cover the entire U.S. fleet, under its Wi-Fi services. Approximately 640 million passengers in the U.S. take domestic flights annually. Therefore, the U.S. domestic flight market will provide approximately $1 billion annual revenue opportunity for ViaSat in the next fiscal year.
Bottom Line
Considering above growth drivers ViaSat has potential to continue its bull run. After registering growth from ViaSat-1, the company is set to launch ViaSat-2. It has teamed up with Boeing to make ViaSat-2 a successful satellite. Moreover, in the near future, the company will provide inflight Wi-Fi services to JetBlue Airways Corporation (NASDAQ:JBLU), and it will then provide inflight Wi-Fi services to United Continental Holdings.
ViaSat, Inc. (NASDAQ:VSAT) is also confident about Exede with increased subscribership. With all this excellent growth potential, the company will prove to be a useful bet for investors. Hence, I recommend a buy.
The article Bet on This Communication Equipment Company for Rewarding Returns originally appeared on Fool.com and is written by Shweta Dubey.
Shweta Dubey has no position in any stocks mentioned. The Motley Fool recommends DirecTV. Shweta is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.
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