Intelsat S.A. I, which operates one of the world’s largest satellite services businesses, communicated that its ‘SD-WAN over Satellite Access’ exhibition has secured the 2019 Service Implementation of the Year award, at the recently held Metro Ethernet Forum (MEF) 3.0 Proof-of-Concept Showcase. SD-WAN technology simplifies the implementation of enterprise networks. The recognition underpins Intelsat’s focus on developing user-friendly services to help its customers expand their businesses and achieve success.
The company displayed how the current MEF ‘lifecycle service orchestration’ standards can enable customers to manage remote site connectivity across different network providers, network types, and SD-WAN technology vendors through a single user portal. Intelsat’s partners on this demonstration included SD-WAN vendors 128 Networks and Nuage Networks; terrestrial service provider CMC Networks; SD-WAN CPE vendor Kontron; software and services providers Infovista and Cloudify; and business consulting company GDX.
Intelsat’s plan for 2019 involves five operational priorities, which are designed to stabilize its core business, improve competitive position, return it to growth and optimize its asset value. Firstly, the company aims to leverage all assets within its global network for maximum return. It further intends to scale its managed services across enterprise, maritime, business jet commercial and aeronautical government opportunities and build powerful distribution channels to amplify its direct marketing efforts.
Third, the company expects to lead the industry in seamless implementation of satellite-based telecommunications solutions with state-of-the-art infrastructure. Intelsat aims to invest in standards-based terminals and ground hardware, innovative and software-defined technology, and participate in 3GPP and other broad telecom sector standards development. In addition, it intends to maintain a disciplined stance on cash flow management and enhance productivity of its deployed capital. Last but not the least, the company expects to optimize its spectrum rights to maintain sector leadership and provide regulatory and operational guidance based on market experience.
Intelsat has the most reliable and technologically advanced commercial communications network in the world. The company’s satellites primarily provide services in the C- and Ku-band frequencies, which form the largest part of the fixed satellite services sector. Its leadership position in an attractive sector and sizeable contracted backlog, together with the demand for broadband connectivity, provides it with a platform for long-term success.
The company intends to boost revenues by driving stability in its core business, employing a disciplined yield management approach, and emphasizing the development of strong distribution channels for its four primary customer sets of broadband, mobility, media and government. Intelsat believes that developing differentiated managed services and investing in related software- and standards-based technology will help augment its relevance within the broader telecommunications landscape.
However, the stock has lost 66.7% against the industry’s growth of 16.1% in the past six months. Intelsat has long-term earnings growth expectation of 10.2%.
A few days ago, Federal Communications Commission (“FCC”) chairman Ajit Pai publicly declared his support for Congress to hold public auctions for Intelsat’s C-Band spectrum. Intelsat and other spectrum holders have been pushing to hold a private auction, which would potentially take place much sooner than a public alternative. The airwaves acquired over the years are mostly used by these firms to deliver videos to TV stations.
Moreover, the spectrum is much in demand by telecom service providers for the deployment of 5G networks. The proposed Senate bill would require sellers to turn over at least 50% of the sale proceeds to the FCC. Highly leveraged Intelsat, in the first place, intended to rake in large sum of money and repay its debt. While Intelsat and other satellite providers have pledged to work with the FCC for an alternative plan, prospect of a litigation against the regulatory authority remains in the cards.
Intelsat currently has a Zacks Rank #3 (Hold).
Some better-ranked stocks in the broader industry are Qualcomm Incorporated QCOM, Ubiquiti Inc. UI and PCTEL, Inc. PCTI. While Qualcomm and Ubiquiti sport a Zacks Rank #1 (Strong Buy), PCTEL carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Qualcomm has long-term earnings growth expectation of 14%.
Ubiquiti has long-term earnings growth expectation of 9.4%.
PCTEL surpassed earnings estimates in each of the trailing four quarters, the average surprise being 150.6%.
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