Telecom service provider Avanti Communications (LON:AVN) has done a deal with BT (LON:BT.A) to provide satellite broadband to its customers.
The company will have the potential to fit satellites to more than 300,000 homes which cannot access download speeds of greater than two megabits per second (Mbps) through terrestrial networks.
Under the government's 'universal service commitment' (USC), these households will be eligible for a £350 grant to subsidise the installation of satellite broadband, with the customer then paying monthly service charges.
David Williams, chief executive of Avanti, said: "We welcome this significant intervention by the government to ensure the USC is met and we are pleased to serve the best interests of the UK consumer."
Government-backed group Broadband Delivery UK is directing the project, which is expected to go live this month.
Digital economy minister Ed Vaizey said: “This scheme offers immediate assistance to those homes and businesses in the most remote areas with the slowest speeds and is all part of our transformation of the UK's digital landscape.”
Cenkos Securities suggests the deal could be worth recurring revenues of £20 per user per month, or around £10mln in revenue annually, with 100,000 homes expected to take up the offer.
The broker added that the company has made a number of deals this year, and that its shares are currently undervalued.
It reiterated its ‘buy’ recommendation on the shares, which gained 4.2%, or 7.5p, to 188.8p on Monday.