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Viasat's Community Wi-Fi to Help Close Digital Gap in Brazil

Zacks Equity Research

Viasat, Inc. VSAT recently announced that it has launched Community Wi-Fi trials in Brazil, with an aim to help close the country’s digital divide by connecting millions of people to high-quality Internet service.

Per media reports, Internet connectivity is expected to be offered as a free service during this trial program. Markedly, the initiative is focused on providing high-speed, affordable and satellite broadband connectivity to people living in communities that have little or no access to the Internet.

In addition, the company’s Community Wi-Fi hotspot service is highly-scalable. It can also be deployed with a minimal local infrastructure investment to rapidly bring cost-effective Internet service to locations where huge gaps exist between demand, affordability and availability.

The satellite-enabled service leverages the Telebras-owned SGDC-1 satellite, which functions in the 18/28 GHz spectrum band. In February 2018, Viasat had inked a deal with Telebras for the commercial use of the satellite for its Community Wi-Fi, residential and business Internet, and in-flight connectivity.

Starting July 2019, Viasat plans to launch a trial program, deploying free Community Wi-Fi hotspots, with speeds up to 25 Mbps in 20 unserved or underserved communities in the state of São Paulo. The satellite and wireless networking technology provider aims to expand the service to Brazil’s Northeast region later this year.

As a result, Brazil will be the second country to experience Viasat’s Community Wi-Fi hotspot service, which was initiated in 2018 in Mexico. At present, more than 1.5 million Mexicans, residing in communities that earlier had little Internet connectivity, are now close to a Viasat Community Wi-Fi hotspot.

Further, the company is working with strategic partners like Visiontec for the roll out of its Community Wi-Fi initiative. Visiontec is helping with the installation and maintenance of the Community Wi-Fi infrastructure at 20 trial sites. (Read more: Viasat Partners Visiontec for High Speed Internet in Brazil)

Driven by solid execution across Viasat’s diversified business lines, the stock has rallied 18.7% compared with the industry’s growth of 3.6% in the past year.

Viasat currently carries a Zacks Rank #2 (Buy). Other top-ranked stocks in the industry include Comtech Telecommunications Corp. CMTL, Ubiquiti Networks, Inc. UBNT and Ericsson ERIC, each sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Comtech has long-term earnings growth expectation of 5%.

Ubiquiti has long-term earnings growth expectation of 19.8%.

Ericsson is currently trading with a forward P/E of 24.5X.

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