Viasat, the satellite communications giant, has had a tumultuous year. A major acquisition (Inmarsat), a high-profile satellite deployment anomaly (ViaSat-3 Flight 1), and a rapidly shifting competitive landscape (Starlink) have kept analysts scrambling. But buried within their recent earnings call transcript lies a potential game-changer that seems to have flown under the radar: a global L-band direct-to-device (D2D) network, poised to take advantage of the burgeoning demand for ubiquitous connectivity.

While much of the attention has focused on Viasat's ViaSat-3 constellation and its potential to revolutionize in-flight connectivity (IFC), the company is quietly laying the groundwork for a parallel revolution in L-band. This network, developed in partnership with Skylo Technologies and Ligado Networks, leverages the new 3GPP Release-17 standard to allow mobile network operators to extend their reach directly to devices via satellite, creating a truly global network.

This isn't just about bolstering connectivity in remote areas, although that is a significant part of the equation. Imagine a world where your smartphone seamlessly transitions from terrestrial cellular to satellite service when you enter a cellular dead zone, be it a remote wilderness area or a concrete-laden urban canyon. This "always-on" connectivity is the holy grail of the mobile world, and Viasat is positioning itself to be a key player.

The potential impact of this development cannot be overstated. The global mobile subscriber base is massive, with over 5 billion unique mobile subscribers worldwide. Even a small percentage of these users opting for a satellite-enabled plan could translate into millions of new subscribers for Viasat.

Hypothesis: The D2D network could contribute significantly to Viasat's revenue growth by 2026.

Here's a potential scenario:

This hypothesis is supported by several factors:

Demand for ubiquitous connectivity: The demand for ubiquitous connectivity is only increasing, as more and more people rely on their mobile devices for work, communication, and entertainment. Global L-band coverage: Viasat's existing L-band network provides global coverage, a key advantage in the D2D market. Strategic partnerships: The company's partnerships with Skylo and Ligado give it access to the expertise and technology needed to quickly bring this network to market. Leveraging existing infrastructure: Viasat has emphasized that this D2D initiative requires no incremental capital expenditure (CapEx), leveraging existing infrastructure to maximize return on investment. This positions them to capture market share quickly and cost-effectively, ahead of competitors who are still building out their constellations.

Viasat's Growth Outlook

While Viasat is clearly focused on leveraging its ViaSat-3 constellation for growth in the IFC and maritime markets, the D2D network could be a hidden ace up their sleeve. With its potential to tap into the vast global mobile market and generate billions in revenue, this network could become Viasat's secret weapon in the battle for global connectivity dominance.

Viasat provided the following guidance in their Q4 2024 Earnings Call: FY 2025: Roughly flat year-over-year revenue with low to mid-single-digit year-over-year adjusted EBITDA growth. FY 2026: Expected revenue and adjusted EBITDA growth to gain relative to FY 2025 as a majority of their $3.3 billion assets under construction go into commercial service.

Capital Expenditure Trend

"Fun Fact: Viasat was founded in 1986 and was one of the first companies to commercialize high-speed satellite internet for consumers."