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Eutelsat, SoftBank Team Up to Boost Connectivity: Stock to Gain?

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Eutelsat Group (EUTLF - Free Report) recently partnered with Japan-based telecom giant — SoftBank Group (SFTBY - Free Report) — to reshape the satellite communication landscape in the East Asian country. By integrating EUTLF’s OneWeb Low-Earth Orbit (LEO) connectivity services into its offerings, SoftBank is likely to enhance its broadband capabilities, delivering high-quality, bandwidth- and communication speed-guaranteed services to a broad spectrum of customers, including corporations and government entities.

A significant aspect of this collaboration is the integration of OneWeb’s LEO services with SoftBank’s closed network service — “SmartVPN.” The direct interconnection is designed to provide an additional layer of security, safeguarding the data transmitted through satellites against potential threats.  As SoftBank and Eutelsat collaborate to provide advanced communication networks focusing on the local market, the scope of their services could extend to additional customers operating in other territories as well. 

The partnership has also received regulatory support that further facilitates the implementation of satellite communication services. Japan’s Ministry of Internal Affairs and Communications has granted SoftBank a blanket license for specific radio stations, including VSAT earth stations and mobile earth stations. It has also granted Eutelsat OneWeb a gateway license, ensuring smooth operation.

EUTLF Gains Momentum From Deal Wins

Eutelsat has been active on the partnership front to drive digital transformation and propel growth. Recently, it strengthened its partnership with Honduras-based cable operator — Cable Color. The multi-year deal renews video broadcast capacity over Central America on Eutelsat's EUTELSAT 117 West A satellite.

Also, in April 2024, Eutelsat inked a multi-year partnership with Puerto Rico-based non-profit organization  — La Gran Carpa Catedral (“LGCC”). Per the multi-year agreement, LGCC will utilize the capabilities of EUTLF’s EUTELSAT 8 West B satellite to expand the delivery of its TV channels to viewers across the Middle East, North Africa and Europe.

It has also forged multi-year partnerships with Sat One, NEC XON and Intelsat, among others.

Will EUTLF Stock Benefit From the Collaboration?

The partnership not only highlights Eutelsat’s penetration into emerging markets but also its ability to deliver premium quality connectivity solutions that cater to the unique needs of different regions. By combining its strength in satellite operations with SoftBank’s expertise in telecommunication, EUTLF is well-positioned to capitalize on the evolving digital needs of businesses in today’s economy and simultaneously drive top-line growth. The improvement in top-line expansion is likely to propel the stock trajectory.

EUTLF’s Zacks Rank & Stock Price Performance

EUTLF carries a Zacks Rank #3 (Hold) at present. Shares of Eutelsat have lost 14.7% compared with the industry's decline of 31.9% in the past year.

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Stocks to Consider

Some better-ranked stocks from the broader technology space are Arista Networks, Inc. (ANET - Free Report) and Harmonic Inc. (HLIT - Free Report) . ANET and HLIT presently sport a Zacks Rank #1 (Strong Buy) each. You can see the complete list of today’s Zacks #1 Rank stocks here

Arista Networks supplies products to a prestigious set of customers, including Fortune 500 global companies in markets like cloud titans, enterprises, financials and specialty cloud service providers. It delivered a trailing four-quarter average earnings surprise of 15.02%. In the last reported quarter, Arista delivered an earnings surprise of 8.25%.

Harmonic enables media companies and service providers to deliver ultra-high-quality broadcast and OTT video services to consumers globally. HLIT delivered a trailing four-quarter average earnings surprise of 32.5%.

 

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