), the largest satellite TV provider in the U.S., has launched a
satellite and broadband bundled service in collaboration with
), which will see the satellite provider distribute ViaSat's
high-speed internet services along with its video packages. The
deal is mainly to focus on the rural areas where there is limited
access to wired broadband service.
ViaSat offers high speed internet service under its Exede
platform which provides maximum download and upload speed of 12
and 3 Mbit/sec, respectively. Customers can choose from different
data packages ranging from 10GB, 15GB and 25GB with the high end
version costing around $129.99. As it is a promotional offer,
customers will get a discount of $10 on all tiered data caps for
the first 12 months and could avail a waiver of $49.99 set up fee
if they sign a 2-year contract.
The new offering provides some relief to the surfing customers
as data consumed for surfing during the off peak hours is not
counted in the data used. Nevertheless, if the customers fail to
stay within the monthly data cap limit, then they can opt to buy
an additional 1GB data, failing which they may face reduced
Despite impressive data speed and an attractive set up fee
discount, the data caps remain a significant downside for the
offer. This is for the reason that the offer will have less
appeal to the video streaming customers, as streaming generally
consumes huge amount of data.
ViaSat is already facing increased competition from
) owned 'HughesNet' high speed internet services. Distributing
its service through DirecTV will provide an incredible
opportunity for ViaSat to popularize its product within a wide
range of customers.
DirecTV's arch rival
Dish Network Corp.
) offers similar bundled service with ViaSat under its DishNET
brand. However, DISH offers a 20GB data cap plan for a monthly
cost of $49.99 and the download speed is10 Mbit/sec.
Teaming up with ViaSat, will allow DirecTV to provide the most
robust bundled offering from any video provider in the mostly
underserved rural areas, where the demand for high speed internet
is enough. Furthermore, competing with DISH for the same market
will make DirecTV's offering much more competitive.
We are maintaining our long-term Neutral recommendation on
DirecTV. Currently, the stock holds a Zacks #3 Rank, implying a
short-term Hold rating.
DISH NETWORK CP (DISH): Free Stock Analysis
DIRECTV (DTV): Free Stock Analysis Report
ECHOSTAR CORP (SATS): Free Stock Analysis
VIASAT INC (VSAT): Free Stock Analysis Report
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