In addition to building new infrastructure, wireless operators tackle broadband capacity constraints by reformatting wireless data plans and restructuring content delivery networks. The companies offering these solutions present investing opportunities, says Andrew Griffin, an Analyst at Bank of America Merrill Lynch.
“There are lots of tricks that the operators can use to reduce loading. Many operators talk about very few users hogging large amounts of capacity, and so they are planning to add limits on how much data a user can use,” Griffin said. “Another way is what’s called content delivery networks, whereby video is stored in exchanges close to the user.”
Griffin points to Alcatel-Lucent (ALU) as his favorite company providing capacity solutions for wireless communications. ALU developed routing for networks, optical switching technology, and ways to measure and ration wireless data based on users’ broadband consumption.
“How do you prevent that heavy user from consuming more data than they should? It’s with a router that’s programmed to monitor how much that guy has been using and calculate when it reaches the limit,” Griffin said. “So Alcatel-Lucent is very much on the ascendancy right now, and we think it has got a very attractive valuation.”
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