A deal to provide equipment for FiberTower's 24 GHz and 39 GHz packet backhaul networks is helping DragonWave move on as its Clearwire (Nasdaq: CLWR) business struggles, a Jefferies & Co. analyst said in a note to clients.
"We believe FiberTower (a new incarnation of former LMDS access companies First Avenue Networks and Teligent) will likely spend 75 percent of its future backhaul spending on microwave (rather than fiber) and think the benefit to DragonWave could be more than $1 million per quarter in the future, providing a 5 percent to 10 percent boost to its non-Clearwire revenues," said Jefferies analyst Peter Misek in the note.
DragonWave needed something to bolster its coffers as Clearwire pulled back on an aggressive rollout schedule. FiberTower, on the other hand, is seeing more business backhauling 3G and 4G traffic for major mobile carriers.
In a related comment, Misek also said that he expects AT&T's (NYSE: T) acquisition of T-Mobile USA could be the final straw that forces a Sprint (NYSE: S)-Clearwire deal, which, in turn could be a benefit to DragonWave.
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