Speedcast (ASX: SDA)
investors need to be wary about what Elon Musk’s Space X is doing.
Speedcast International is a satellite services company with operations stretching from Brisbane around to Perth. Ships, mining companies, Government groups and other parties can use their services for communication.
Speedcast’s Elon Musk Problem
Space X is working on a plan to use a huge satellite network according to reporting by CNN, eventually with thousands of satellites, that will orbit the planet about 300 to 700 miles above us and beam cheap & high-speed internet to users all over the world.
The ‘Starlink’ project is already providing internet to some locations like Elon Musk’s house and the cockpits of a few airforce jets. Earlier in the year in May, 60 satellites were launched on one of Space X’s Falcon 9 rockets. In 2020 there will be up to 24 more launches, each with 60 satellites. The southern part of the US will be the first place to get the service.
One of the main ideas of this project is to bring internet to people who don’t currently have it, or at least have less than adequate internet coverage.
Space X is confident that it can compete with US internet providers for a cheaper price and better service. To get it to work consumers will need to install it out of a window on a roof or outside somewhere.
Elon Musk’s Space X isn’t the only company working on this. There are also operations by Amazon and OneWeb to get a similar service up and running in the next few years.
What Does This Mean For Speedcast?
It’s very early days. Speedcast provides specialist services to remote locations. But in time we may see Amazon, Space X and so on try to win these big contracts from cruise liners and other remote businesses.
Growing competition could cause problems for Speedcast in the future, which is why I’m cautious about buying shares despite the share price decline. I’d rather buy the reliable shares in the free report
below.
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