Frontier Communications (FTR) Set To Deploy Nokia's G.fast
Zacks Investment Research | May 26, 2017 02:24AM ET
Regional wireline telecom operator Frontier Communications Corp. (NASDAQ:FTR) is planning to deploy Nokia (HE:NOKIA) Corp.’s (NYSE:NOK) G.fast technology in Connecticut. The technology is aimed to deliver gigabit-speed broadband services to everyone living in apartments and multi-dwelling units (MDUs) throughout the state.
The G.fast node will help Frontier Communications bring ultra-broadband access and fiber connections to each MDU basement location by utilizing the existing copper pair wiring in each apartment. Apart from saving time it will also be a hassle-free process. Another additional feature of Nokia’s G.fast solution is that it automates the deployment process via SDN (Software-defined networking) capabilities in compliance with NetConf and Yang models.
The G.fast approach is expected to be a key element of broader copper network upgrade plan which will simplify the broadband installation and activation process in MDUs.
Why G.fast?
Telecom operators are mainly focusing on increasing their fiber footprint. However, there are areas where fiber networks are yet to reach. Telecom operators look to provide alternate solutions to provide high-speed Internet service through the existing copper networks. G.fast is one such networking protocol that allows higher Internet speeds within a short range of the Incumbent Local Exchange Carrier (ILEC). G.fast is gaining popularity in the copper-wired MDU market.
This marks a strategic business move on Frontier Communications’ part as copper-based G.fast hasn’t seen significant uptake among the telecom operators in the U.S. A major portion of the country's broadband infrastructure is based on hybrid fiber-coaxial networks, and a significant portion of copper networks have already been phased out in favor of fiber-to-the-home or wireless alternatives.
The G.fast technology is gradually coming into the limelight. Windstream Holdings Inc. (NASDAQ:WIN) has deployed the same in its multi dwelling units (MDU) in Nebraska in Jul 2016. AT&T Inc (NYSE:T). CALX AXOS G.fast solution. Notably, G.fast works well in densely populated areas providing speeds of up to 1 Gbps.
We further believe that declining customer base can also be a reason that has compelled Frontier Communications to boost Internet speeds. As of Mar 31, 2017, Frontier Communications had 4,164,000 high-speed broadband subscribers, down 2.5% sequentially and 1,065,000 video customers, down 7%. This is because a number of its carrier partners might migrate to Ethernet solutions at lower price points while some customers may switch to competitors. Thus, deteriorating wireless backhaul business is expected to remain a headwind for Frontier Communications.
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Management expects this downward trend to persist in the near future. To this end, the G.fast rollout in Connecticut will help Frontier Communications compete more effectively in the broadband sector. The telco is planning for further deployments on a broader scale.
Price Performance and Zacks Rank
Over the past three months, share price of Frontier Communications have declined by 58.66% while the Zacks categorized Wireline - Regional - Rural industry contracted 32.11%.
Meanwhile, share price of Nokia grew 23.55% while the Zacks categorized Wireless Equipment industry gained over 6.31%, over the same time frame.
Both Frontier Communications and Nokia currently carry a Zacks Rank #3 (Hold). You can see .
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