As Lightower continues to roll out more fiber to cell sites and small cells, the service provider is creating a foundation to win more business customers in its footprint.
One of the elements that has helped Lightower advance its wireless backhaul capabilities -- particularly in providing turnkey services for small cells -- was its acquisition of Fibertech. The service provider not only gained a larger fiber footprint in Tier 2 cities like Rochester, New York, but a set of services such as site acquisition, power acquisition, cell radios installation. Fibertech also enhanced Lightower's remote hands monitoring of the radios after they are installed.
"Lightower is doing much work in small cell space and is very optimistic as to growth here," said Jennifer Fritzsche, senior analyst for Wells Fargo, in a research note. "While most of this small cell push is in the urban core, Lightower is also doing much work in throughways between these urban areas.
Lightower can also capitalize on the wireless industry's growing interest in dark fiber for wireless backhaul. Verizon (NYSE: VZ) and now Sprint (NYSE: S) have cited dark fiber as a key element of their wireless backhaul plans.
Fritzsche cited Lightower's CEO Rob Shanahan, who told Wells Fargo during a visit to their facility that the "fiber to the tower business is shifting from lit to dark fiber" and that "one carrier (we suspect VZ) is ahead of the rest with both these initiatives --but others are jumping in."
The backhaul rollouts also afford Lightower the ability to address new enterprise service opportunities within various sectors like higher education, health care and finance.
This is due to the fact that the fiber being installed for towers and small cells typically runs along the same streets where businesses reside.
An additional opportunity for Lightower is also with content providers like Netflix (NASDAQ: NFLX) and Amazon (NASDAQ: AMZN) that need higher bandwidth fiber solutions to backhaul and support their consumer traffic.
"While Lightower is seeing robust growth in education and healthcare, the content vertical is seeing significant demand for both lit and dark fiber," Fritzsche said.
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