Microsoft (MSFT - Free Report) recently entered into a partnership with Israel-based global wireless broadband provider, RADWIN. The companies have teamed up to offer cost-effective broadband internet services to “underserved and unserved” rural communities worldwide.
The 21st century is basically governed by the internet and consequently the access to this service forms the very basis of this world. However, per World Internet Users data, only 54.4% of world’s population utilizes internet services in 2017. The partnership is a step in the direction of bridging this immense gap by providing affordable broadband connectivity.
RADWIN will develop and market TVWS offering which will complement its sub-6GHz and mmWave fixed wireless solutions. This will aid the company’s service provider users and partners to expand presence to subscribers in remote areas. The market is difficult given the terrain obstacles and vegetation but with the kind of potential that it holds, the risk might be one worth taking.
As part of Airband Initiative, Microsoft partners with telecommunications companies and internet service providers (ISPs) to provide innovative solutions which enhance rural connectivity. Digital skill training is also imparted to the people under the initiative.
The innovative new TVWS solutions will be provided to Airband Initiative partners, and consequently to global telecommunications industry in the second half of 2019.
Shares of the company were up 1.4%, yesterday. Microsoft shares have returned 17.9% year to date, substantially outperforming the industry’s 15.7% rally. This outperformance can primarily be attributed to its rapidly expanding efforts in Artificial Intelligence (“AI”) and Internet of Things (“IoT”) based developments. Undisturbed focus on Azure remains a key catalyst.
TVWS Tech: Focal Point of the Partnership
The strategic deal is part of the tech giant’s Airband Initiative. This initiative seeks to augment broadband coverage leveraging various technologies comprising the innovative TV White Space (TVWS), among others.
TVWS generates broadband connections in ultra high frequency (UHF) bands. The technology makes communication easier and secure despite testing rural conditions.
“The TV White Space radio ecosystem is rapidly growing, and we are excited to work with RADWIN to bring innovative technologies to market at a global scale,” said Paul Garnett, senior director of the Microsoft Airband Initiative.
What the Investors Need to Know?
In an effort to expand penetration into smaller markets at different levels, increasing participation of rural population in the digital economy becomes a necessity. Moreover, per Boston Consulting Group data, a robust cost-effective connectivity model can be developed by leveraging TVWS tech combined with other technologies.
In this era of digitization, where more and more people leverage internet services for their respective purposes, this partnership holds promise.
Per a MarketsandMarkets report, the global TVWS spectrum market was is envisioned to grow at a CAGR of whopping 74.3% to reach approximately $53.1 million by 2022 from $1.2 million in 2015. As a result, the partnership to deliver broadband connections powered by TVWS tech bodes well in the longer haul.
The rural pockets bereft of internet connectivity can benefit a great deal from the solution. Consequently, businesses including the likes of education, agriculture and telemedicine, can develop and prosper. These factors will aid Microsoft toexpand market reach and explore emerging ventures, eventually uplifting the economy.
Zacks Rank & Key Picks
Microsoft currently carries a Zacks Rank #3 (Hold).
Better-ranked stocks in the broader technology sector are Seagate (STX - Free Report) , Mellanox (MLNX - Free Report) and Micron (MU - Free Report) , each sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The projected long-term earnings growth rate for Seagate, Mellanox and Micron are 18.9%, 15% and 8.2%, respectively.
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