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Microsoft, NBS to Provide Broadband Solutions in Rural Areas

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Microsoft (MSFT - Free Report) recently entered into a strategic partnership with Illinois-based global wireless broadband provider, Network Business Systems (NBS). The companies have teamed up to offer cost-effective broadband Internet services in rural areas of three states— Iowa, Illinois and South Dakota. This includes 126,700 “unserved” rural people.

Internet forms almost an intrinsic part of day-to-day functioning in the 21st century and consequently access to the service forms the very crux of this world. However, per World Internet Users data, only 54.4% of world’s population utilized internet services in 2017. Further, per the press release, roughly 36%, 22% and 25% of people living in rural Illinois, Iowa and South Dakota, respectively, lack access to broadband internet.

The partnership is a step in the direction of bridging this immense gap by providing affordable broadband connectivity.

Network Business Systems will develop and market wireless internet access networks solutions using TV white spaces (“TVWS”) offering.  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 TVWS, among others.

TVWS generates broadband connections in ultra-high frequency (“UHF”) bands. The technology makes communication easier and secure despite challenging rural conditions.The move will enhance broadband connectivity to around 2 million “underserved” people in rural community by Jul 4, 2022.  Digital skill training will also be imparted to the people under the initiative.

Microsoft shares have returned 32% year to date, substantially outperforming the industry’s rally of 26.7%. 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 Growth Prospects

Per a MarketsandMarkets report, the global TVWS spectrum market 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.

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.

As a result, the partnership to deliver broadband connections powered by TVWS tech bodes well in the longer haul.

Zacks Rank & Other Stocks to Consider

Microsoft currently carries a Zacks Rank #2 (Buy).

Other top-ranked stocks in the broader technology sector are Inc (CRM - Free Report) , Mellanox (MLNX - Free Report) and NetApp, Inc. (NTAP - 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 Salesforce, Mellanox and NetApp are 25%, 15% and 14.1%, respectively.

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