SpaceX’s promised government support for the Starlink satellite network could have a significant effect on the telecom sector. As a consequence, certain firms may have access to new opportunities and, so far, the stocks do not take this future development into account.
SpaceX has successfully entered a market for services for sparsely populated areas of the United States under the internet provider support scheme. With the prospect of expanding by another $4.4 billion, this initiative is worth a total of $16 billion over 10 years. It became public in December 2020 that SpaceX would earn $885.5 million under that program.
Over the next 10 years, Starlink satellites will provide satellite internet to more than 642,000 homes in remote areas in 35 U.S. states. Just a tenth of the overall program expense was earned by SpaceX, but this portion may be the most significant one. In the future, membership in the federal initiative eliminates the possibility of regulatory limits on satellite network implementation.
A group of states will be served by SpaceX, including parts of the states of Florida and Hawaii. Active shipping and transport of small aircraft exists in these regions. The accessible high-speed internet has already been very much in demand by users using yachts and private jets. This dilemma will be addressed by Starlink and tens of thousands of wealthy clients will be able to obtain new facilities.
Garmin Ltd. (GRMN), which manufactures navionics for ships and aircraft, will be one of the beneficiaries among others. The satellite internet would open up new monetization possibilities, such as real-time streaming of weather maps and cloud connectivity with coastal networks and other boats.
Video distribution platforms, most prominently Netflix Inc. (NFLX), which would obtain access to a new demographic, are other beneficiaries.
Garmin Ltd. (GRMN) stock was a bit up +0.12% to $119.52 in the second-last trading session of the year whereas Netflix Inc (NFLX) was down 1.18% to close the session at $524.59.