some good news new on hereDragonWave, Sandvine to rise on Verizon's move to next-gen
networks
VerizonWireless, one of the largest mobile-phone carriers in the U.S., isreportedly accelerating plans to introduce next-generation networktechnology that analysts at Canaccord Adams said bodes well for theprospects for a pair of Canadian technology stocks, includingDragonWave Inc. (
DWI/TSX) and Sandvine (
SVC/TSX).
Verizonwill be the first North American carrier to begin commerciallydeploying new, ultra-fast networks based on what is loosely calledlong-term evolution or LTE technology. The company said recently itplans to introduce LTE into several markets by early 2010 have haveabout 30 U.S. cities covered by the end of next year.
The gearpromises to deliver higher amounts of data such as video-streaming andonline software applications at much higher speeds than what carrierscurrently offer (in the order of five to six times today's networkswhich typically deliver data at a rate of between 7.2 megabits persecond and 21).
The earlier-than-expected launch meansOttawa's DragonWave, an LTE gear maker, will reap new material ordersand sales, said Canaccord's Peter Misek in a research note this week.
Verizon is also considering traffic and policy
management solutionsin anticipating of an explosion of data consumption from subscriberswhich could test the new network's capacity. A clear winner here willbe Waterloo, Ont.-based Sandvine Corp., which develops systems thatgovern traffic flows on the Web.
Mr. Misek said developmentsare "very positive" for DragonWave, which he has a Buy rating on with a$6.88 price target. The upgrade is "positive" for Sandvine, which theanalyst $1.12 target for, calling it a Speculative Buy.
Theanalyst cautioned though that Verizon management failed to provide muchdetail beyond iterating its intentions to ramp up the network andproduct upgrades. "Verizon's LTE plans and product roadmaps are clearlyfluid," he said.
"We expect more details to emerge in thecoming weeks and months, which should reinforce our bullish outlook onsmartphones and select areas of wireless infrastructure."