Viasat, Inc. VSAT recently announced that it has successfully demonstrated direct-to-device (D2D) satellite connectivity for applications in the automotive industry. This is the first demonstration of D2D technology, which is used to connect vehicles. This can have a transformational impact on the transport industry.

During the demonstration, VSAT utilized 3GPP-compliant D2D technology and non-terrestrial network service infrastructure. The 3GPP Release 17 standard brings convergence of satellite and cellular technologies to facilitate seamless satellite connectivity for smartphones, vehicles and industrial machines, eliminating the need for dedicated satellite terminal.

VSAT’s leading-edge technology will efficiently support a wide range of applications in the automotive sector. It supports narrowband tracking and monitoring capabilities and provides location data with greater precision, ensuring seamless navigation. It can also be used for predictive maintenance, which can help in preventing vehicle breakdown. The solutions are suitable for real-time supply-chain tracking. The trial, which took place in Brazil over a period of four months, was conducted utilizing VSAT L-band satellites in conjunction with reliable L-band satellites, Skylo’s network.

Will This Development Drive VSAT’s Share Performance?

Traditionally, the use of D2D technology has been thought of as a connecting cell phone via satellite. However, the current successful demonstration of satellite connectivity can be a game changer for automotive applications and the transport industry. Many remote areas lack access to terrestrial network infrastructure as development of network infrastructure in sparsely populated areas is deemed economically unviable. As the automotive sector moves toward incorporating advanced communication systems, automotive and transport businesses operating in rural and remote areas will have difficulty accessing these advancements.

Recognizing the potential of satellite communication in the transport industry, VSAT is steadily advancing its portfolio. The company is actively working with multiple chipset manufacturers and mobile network operators to drive advancements in its mobile satellite service network capabilities. VAST has already successfully demonstrated satellite communications capabilities in several countries, including India and the UAE. These developments will likely boost VSAT’s commercial prospects in the long run.

Viasat is also ramping up investments in the development of its revolutionary ViaSat-3 broadband communications platform, which will have nearly 10 times the bandwidth capacity of ViaSat-2. These satellites will be capable of covering one-third of the world, including all of the Americas. The ViaSat-3 platform will help to form a global broadband network with sufficient network capacity to allow better consumer choices with an affordable, high-quality, high-speed Internet and video streaming service. In a nutshell, Viasat has garnered enough economics of scale and scope to serve vast emerging markets in South America, Africa, the Middle East and Western Asia.

However, intensifying competition from other major players in the industry, such as AT&T, Comtech, Starlink and DISH Network, is impeding net sales.

VSAT Stock’s Price Movement

Shares of Viasat have lost 50.2% over the past year against the industry’s growth of 47.2%.

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VSAT’s Zacks Rank and Key Picks

Viasat currently carries a Zacks Rank #3 (Hold).

Here are some better-ranked stocks that investors may consider.

InterDigital IDCC sports a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

In the trailing four quarters, it delivered an earnings surprise of 158.41%. It is a pioneer in advanced mobile technologies that enable wireless communications and capabilities. The company designs and develops a wide range of advanced technology solutions used in digital cellular, wireless 3G, 4G and IEEE 802-related products and networks.

Celestica Inc. CLS carries a Zacks Rank #2 (Buy) at present. The company provides competitive manufacturing technology and service solutions for printed circuit assembly and system assembly, as well as post-manufacturing support to many of the world's leading original equipment manufacturers.

United States Cellular Corporation USM sports a Zacks Rank of 1 at present. In the last reported quarter, it delivered an earnings surprise of 150%.

U.S. Cellular has taken concrete steps to accelerate subscriber additions and improve churn management. The company aims to offer the best wireless experience to customers by providing superior quality network and national coverage. It is well-positioned to support the investment required for network enhancements, including the deployment of 5G technology.

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This article originally published on Zacks Investment Research (zacks.com).

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