Network infrastructure provider Dycom could potentially benefit from the deployment of last mile wireless broadband solutions, said Wells Fargo analyst Jennifer Fritzsche, as it could free up more capex for further fiber passings.
In a recent research note, Fritzsche said concerns have arisen regarding the impact Google’s wireless last mile plans and AT&T’s ambitions to extend mmWave spectrum via antennas installed on power lines. Wells Fargo was careful to note that such solutions may not prove to be effective, but if they do end up working into deployment plans within home and the drop area surrounding them, then the outcome could mean a boost for fiber installers.
“In our view, if carriers are able to save capital from this part of the build, they could deploy more fiber passings TO the 200 ft around the home (perhaps both in and outside of the customer's geographic regions) – which would be a boon to DY,” wrote Fritzsche.
Relating to telco spending in general, Wells Fargo sees spending by AT&T and CenturyLink both steadily ramping up, based on conversations with Dycom. As the firm pointed out, AT&T and CenturyLink are Dycom’s two biggest telecom customers.
Beyond the boost Dycom could get from increased telecom infrastructure investment, Wells Fargo believes cable companies could be the “dark horse” of Dycom’s story. According to the firm, Comcast is now Dycom’s second biggest customer and Charter is its sixth biggest. Both of those companies have indicated that pushing fiber deeper into the network will be part of their strategies moving forward.
“If DY is able to tap into this network effort, we believe Charter could continue to grow in DY's customer rank (Charter is now customer #6). It is worth noting that CMCSA and Charter combined pass over 105MM homes – so the opportunity for DY is indeed significant,” wrote Fritzsche.