Problems at Viasat (VSAT)
Viasat (NASDAQ: VSAT — $1.34 billion) owns a fleet of around twenty satellites that provide “cost-effective, high-quality broadband, narrowband and other connectivity solutions to aviation, maritime, enterprise, consumer, military and government users around the globe.” The Bear Cave believes new competition led by SpaceX’s Starlink is stealing share from Viasat’s key markets and will continue to grow at Viasat’s expense. And with the election of President Trump, Elon Musk and Starlink have gained a powerful new ally in competing against Viasat. Based on the collective reviews of customers, employees, and engineers, The Bear Cave concludes Viasat is a dead company walking.
Starlink by SpaceX is a relatively new collection of low-orbit satellites that provide internet connectivity across the globe, often with greater bandwidth and lower latency than traditional solutions like Viasat. One use case for Starlink became obvious on the campaign trail when President Trump highlighted the role Starlink played in restoring communication in the aftermath of Hurricane Helene in September 2024.
President Trump said that governors asked him to call Elon Musk to get Starlink hardware delivered to affected areas. President Trump added, in part,
“It was pretty amazing he got [Starlink] here in record time. He had Starlink here and your communications went from non-existent to probably almost better than what it was before. And I want to thank Elon Musk for having done a great job. He took care of a very important need and probably saved a lot of lives… [Starlink] is very hard to get too. It’s been pretty popular.” (1:00)
As early as 2021, satellite company executives were asked about the competitive threat of Starlink. In an October 2021 interview the CEO of GoGo (NASDAQ: GOGO — $1.08 billion), a private jet internet company, joked that “Elon Musk burps and we’re down 5%” and downplayed the threat of Starlink for his company saying:
“Elon’s got much bigger markets to worry about than our market. Our industry is about $500 million total today, we think it’s going to grow to about a billion dollars by the end of 2025. That’s peanuts compared to the $325 billion fixed connectivity business, or the $80 billion defense or military/government market, or the $7 billion commercial airline market. We think he’s got bigger fish to fry than us.” (5:30)
Viasat is the bigger fish that Starlink will fry.
Mr. Musk seems to agree and has previously tweeted that Starlink “poses a hazard to Viasat’s profits.”
Let’s explore how Starlink is affecting Viasat’s business segments, starting with commercial aviation.