© Reuters.
Boeing (NYSE:) has officially abandoned its plans to establish a broadband internet constellation, surrendering its Federal Communications Commission (FCC) license and paying a $2.2 million penalty. The decision was announced by Michelle Parker, vice president of Boeing Space Mission Systems.
Despite the competitive challenges highlighted by SpaceX CEO Elon Musk, Boeing remains optimistic about the commercial potential of the V-band. Ryan Reid, president of Boeing Commercial Satellite Systems, had previously detailed plans for a Non-Geostationary Satellite Orbit (NGSO) constellation with a focus on business-to-business partnerships.
In September 2022, Boeing launched its Varuna prototype satellite via a SpaceX Falcon 9 rideshare mission. The Sherpa-LTC 2 transfer vehicle carried the Varuna Technology Demonstration Mission (Varuna-TDM) payload into orbit where it continues to operate.
The FCC had initially granted Boeing a license for a 147-satellite V-band constellation. However, the company’s subsequent request for an expansion to over 5,000 satellites was denied due to stringent deployment rules designed to prevent spectrum squatting.
Following this decision, Boeing has now shifted its focus towards other space connectivity growth opportunities. The impact of the FCC’s 50% rule and spectrum squatting prevention efforts on this decision remains unclear as Boeing did not respond to requests for clarification.
Meanwhile, other contenders in the satellite internet market like Amazon’s Project Kuiper, OneWeb, Telesat, and Astra are continuing to make significant progress.
InvestingPro Insights
Boeing, with its significant presence in the Aerospace & Defense industry, has seen accelerated revenue growth of 23.34% over the last twelve months as of Q3 2023, according to data from InvestingPro. Despite this, the company has been grappling with weak gross profit margins, standing at 11.44% for the same period. Additionally, 14 analysts have revised their earnings downwards for the upcoming period, indicating potential challenges ahead.
InvestingPro data also reveals that Boeing’s market capitalization stands at $116.24B, with a negative P/E ratio of -41.07. This, along with the fact that the company has not been profitable over the last twelve months and its stock price has fallen significantly over the last three months, suggests that investors might need to exercise caution.
For those looking for more comprehensive insights, InvestingPro offers a wealth of additional tips and data points. For instance, there are six more InvestingPro Tips and a plethora of real-time metrics available for Boeing. These can provide a more nuanced understanding of the company’s financial status and market position, aiding in making informed investment decisions.
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