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Aviat Networks Inc: Fine Tuned to Meet the Growing Demand for 5G

11 Feb Aviat Networks Inc: Fine Tuned to Meet the Growing Demand for 5G

Aviat Networks, Inc. (NASDAQ: AVNW), a provider of wireless networking products and solutions, has been selected by DISH Network Corporation (NASDAQ: DISH), owner of the direct-broadcast satellite provider Dish, and IPTV service Sling TV, as a supplier of 5G microwave transport for its 5G business. Dish will obtain Aviat’s hardware and software solutions from the Aviat Store ecommerce platform, and will build a high-capacity 5G microwave wireless transport network that not only delivers the midhaul and backhaul connectivity it seeks, but also bring in affordability and reliability.

The offer also includes products such as the industry’s only single box multi-band solution, highest system gain radios for optimum capacity, and radios with integrated software defined networking (SDN) capabilities.

Pete Smith, president and CEO of Aviat Networks, commented

“We have the best microwave solutions on the market today. “As 5G networks migrate to O-RAN, operators are able to choose the best-in-class backhaul vendor. As the leading specialist, the evolution to O-RAN creates exciting 5G opportunities for Aviat.”

The Company had recently released its Q2,2021 financial results, which showed a 26.0% growth in revenue at $70.5 million for Q2, 2021 as compared to $56.0 million Q2, 2020.

Aviat Networks (NASDAQ: AVNW)

Market Cap: $300.51M; Current Share Price: 54.01 USDChart
Data by YCharts

The advent of the internet and rapid globalization is driving the demand for high-quality, reliable data transmission. Increased adoption of IT–based solutions, the need for networking in almost all spheres of life and growing demand for mobile and internet services are other factors which are contributing to the growth in the industry.

Fiber-based networks are conventionally preferred for 5G backhaul network planning, however Microwave-based transport solutions offer cost efficiency, speedy installation and reliability and have been the first choice when it comes to macro-site radio access network (RAN). Technological advancements in software and hardware have led to microwave transport capacity increase from megabit-per-second capacity to gigabit-per-second capacity.

Front Haul backup is the most challenging, due to high bandwidth requirements and latency restrictions, and fiber was deemed the only solution to the demanding requirements of this segment, however millimeter wave (mmWave) frequencies above 30GHz that can boost data rates to 25Gbps are a viable alternative too, in cases where fiber is not possible or costs are prohibitive, as per a report by Heavy Reading’s 2020 5G transport survey.

According to Jimmy Yu, Vice President, Dell’Oro Group,

“The 5G wireless transport market is expected to grow exponentially to over $1B in 2023, and microwave will play a critical role in this growth. Despite common perception, it’s not just about fiber.”

Aviat Network has over 70 years of experience in wireless transport solutions encompassing design, deployment and management of network challenges. The Company provides products and services such as Integrated Microwave Routers, 5G transport Multi-band radio, microwave switches and other automation solutions. The Company boasts of more than 1,000,000 installed systems, with over 3000+ customers worldwide and supports over 370 mobile networks globally.

From making the industry’s first IP/MPLS wireless router, the first cloud-based automation platform to the highest power microwave radio ever built, the Company at been at the forefront of innovation in the wireless transport space. The Company serves diverse industries and sectors such as mobile service providers, utilities, government agencies, energy and transportation companies.

Image Source: Company

The Company’s highly differentiated product offerings include Aviat Design that offers Cloud-based path design application, Aviat Store, an ecommerce platform that simplifies purchase and offers fast deliveries, Aviat SW Licensing, an Automated software license management system and Avait Care, Cloud-based support that facilitates repair/return, documentation, training, e-learning and certification. In addition, the Company also provides hosted services like Network monitoring and management and Interference monitoring and resolution software and service.

The Company’s 5G solutions include 10+Gbps radios that are all-outdoor, multi-band, and integrated MPLS, Highest power radios for lowest TCO, Software solutions like SDN and automation, a supply chain with quick deliveries and an E-commerce platform to support 5G rollouts.

Image Source: Company

Key Takeaways

  • Aviat believes that the growing demand for 5G networks and the unmet needs in Public Safety and Security Related Communications, rural broadband and emerging economies gives it tremendous opportunity for growth in the future. The Company is targeting a 6 percent share of the $3 Billion market opportunity through its industry-leading innovation in product, service and differentiated delivery and supply chain offerings a such as Unique multi-band solution for 5G, the only interference monitoring software for microwave and first to integrate microwave and IP/MPLS routing to name a few.
  • The Company is well positioned to serve the needs of rural broadband, a market that has received increasing government support and funding, including $9 billion 5G Fund for Rural America and the $20 billion Rural Digital Opportunity Fund. The Company has recently landed a contract with Nextlink Internet to support their initiative to bring high-speed internet to rural America. The Company has received a multimillion-dollar blanket purchase order from Nextlink, which will be used to purchase Aviat Products through Aviat Store, to extend its fiber backbone utilizing the Aviat WTM 4000 microwave and multi-band platform.
  • The Company has notable customer wins in Mobile 5G such as contract with a U.S.-based Tier 1 5G operator, and contract extension with Globe Telecom for Aviat’s WTM 4800 MultiBand Solution to Support 5G Deployments. The Company has also been awarded a contract with Safaricom, Kenya’s largest telecom Company for its WTM 4800 multi-band radio platform for 5G backhaul.
  • Aviat reported Total Q2 Fiscal 2021 Revenue of $70.5 Million as compared to $56.0 in Q2 FY20, an increase of 26% Year-Over-Year. The Company also achieved record Adjusted EBITDA Margin of 14.3%, the highest since its inception. Furthermore, the Company has reaped benefits from cost saving and restructuring initiatives as reflected by its Non-GAAP Operating Expenses Down 4.1% Year-Over-Year. Most importantly the Company has increased the revenue guidance and Adjusted EBITDA Guidance to $255-$265 Million and $28-31 Million respectively. Aviat had $43 Million in cash and cash equivalents and no debt in Q2 FY21 as per its financial reports.
  • Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

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