Avanti Communications Group (LON:AVN) has announced a major new cellular backhaul contract with EE in the UK, demonstrating continued growth in this important segment of demand.
The upcoming Q3 trading statement will provide an opportunity for Avanti to update and reassure the market that it remains on track to deliver on its plans.
As this becomes increasingly evident, we would expect the shares to progressively reflect the potential of the cash-flow based valuations, which suggest substantial current undervaluation, with further upside potential as risk retires over time.
$29m UK cellular backhaul contract win with EE
Avanti has announced that it has won a major cellular backhaul contract with EE worth an initial $29m, with options to double the capacity. Cellular backhaul provides connectivity and network resilience to remote locations.
Under the contract, Avanti will connect a large number of static and mobile sites to the EE network in the UK, using capacity on HYLAS 1 and HYLAS 2. The contract is multiyear and provides validation for the use of Avanti’s Ka-band network for the provision of cellular backhaul services, and the growth of the backhaul segment.
The first backhaul contract with Vodafone was signed in February 2014, and EE now adds to a growing list of high-quality customers with increasing backhaul demand driven by 4G network investments.
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