Viasat Inc.

However, there is bipartisan government support to increase broadband availability in rural markets, a move that will shrink Viasat's in-home internet addressable market over time. The government awarded $9.2 billion of the $20 billion Rural Digital Opportunity Fund (RDOF) for broadband grants in early December. This round of funding will give almost 4.5 million homes access to broadband speeds of 1 gigabit that Viasat cannot compete with. The remaining money will be allocated to underserved markets in the next round of the auction, which could further shrink Viasat's addressable market. Still, we believe the increased competition will be gradual, as subsidies are spread evenly over 10 years, starting in 2022. Notably, Viasat was not awarded one of the RDOF Phase

...We expect the COVID-19 pandemic to pressure Viasat's growth momentum in fiscal 2021 (ending March 31, 2021). Conditions in the global airline sector have weakened substantially since the start of the COVID-19 pandemic. Viasat Inc. historically generated roughly 12% of its revenues from in-flight connectivity (IFC) services provided to commercial aircrafts. We expect the negative effect on revenues from the pandemic to continue in fiscal 2021 due to the severe decline in global air traffic, as revenue is highly correlated to levels of commercial air travel. We expect a weak recovery in 2021, with commercial air traffic still 40%-60% lower than in 2019 and remaining 10%-15% lower than 2019 in 2023. Our estimates incorporate the recent consensus among health experts that a vaccine may be widely available by the middle of 2021 but incorporate a high degree of uncertainty around the evolution of the pandemic, including acceptance of effective immunization. However, we expect modest growth in...

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