Broadband Briefs for 12/16/09
• ViaSat wraps WildBlue purchase
By Brian Santo
ViaSat has completed its acquisition of WildBlue Communications, a small, satellite-based provider of broadband services. The purchase was announced in October.
WildBlue currently offers a service popular largely among consumers who have few, if any other, broadband options. The company’s current data throughput is about 1.5 Mbps.
ViaSat expects WildBlue will be able to quadruple or quintuple those rates with the new ViaSat-1 satellite scheduled to launch in early 2011.
Mark Dankberg, ViaSat’s chairman and CEO, said: “The WildBlue acquisition advances our entry into the Ka-band broadband service business by over a year, and more completely establishes the financial and strategic framework to capture the value anticipated from the ViaSat-1 satellite. We also believe the resources and skills of the WildBlue team add greater momentum to our plans to bring satellite broadband to new markets and applications on a global scale.”
• Qwest shares climb after UBS upgrade
By The Associated Press
NEW YORK (AP) – Shares of Qwest got a boost Tuesday after the phone company was upgraded by UBS analyst John C. Hodulik, who cited the stock's attractive value and expectations for improving revenue. Qwest, based in Denver, is the primary local phone service provider in 14 mostly Western states. Hodulik upgraded the company's shares to "Buy" from "Neutral" and raised his target price to $5.50 from $3.80.
He called Qwest a "strong contender for 2010" and said it could be a takeover target as the rural landline market consolidates.
Qwest has been struggling to find ways to grow sales as its customers continue to give up traditional landline phones. It faces competition from cable companies and cell phone providers who are luring away customers. But Hodulik said "fundamentals in the business and wholesale markets are likely to improve in 2010 after less-than-stellar results in 2009." Sales to these two markets make up 64 percent of Qwest's total sales, and because they haven't been strong, they have led investors to "largely disregard the exceptionally strong free cash flow generated by the company," the analyst said.
Qwest's shares rose 19 cents, or 4.7 percent, to $4.27 in afternoon trading. The stock has traded in the 52-week range of $2.86 and $4.87.