EE looks to satellite mobile backhaul with $29 million Avanti deal

As part of its enhanced coverage drive in the UK, EE has pledged to spend nearly $30 million on dedicated 4G satellite mobile backhaul with Avanti.

Following recent announcements citing the operator’s plans to reach 95% UK geographic 4G coverage by 2020, the operator will be using Avanti’s HYLAS 1 and 2 satellites to connect a number of its cellular sites across the country. The satellite capacity for cellular backhaul will, according to Avanti, help the operator reach more remote and rural areas of the country, while simultaneously boosting the resilience of the network.

“We are delivering a highly resilient, truly nationwide 4G network and Avanti will play a key part in providing resilience and extending this network into rural areas,” said Manso Hanif, Director of RAN at EE.

The announcement has proven popular with financial analysts keeping an eye on Avanti. According to securities firm Cenkos, operator business traditionally represents 3% of Avanti’s annual revenue forecast; yet the client win with EE has seen the company achieve more than one third of forecasted revenues for the year.

“Avanti’s telco exposure prior to this announcement was less than 3% of revenues and major agreements such as this will see carrier services rise materially as a percentage of sales,” said Cenkos in a statement. “Avanti already supplies these services to major carriers such as Vodafone but there are acute shortages in mobile backhaul capacity across EMEA. We believe there is considerable growth potential for Avanti in this sector as 3G and 4G networks are rolled out, leading to an exponential increase in backhaul requirements.”

Financial analyst firm Jeffries believes there is a high amount of opportunity for more operators looking to solve their backhaul capacity issues using satellite. “In our view this is a positive development – not only is it a material source of revenue growth with upside potential – but perhaps more importantly, cellular backhaul has long been touted as a critical application for high throughput capacity driven growth. To see Avanti secure a material deployment with a “household” name in a major market certainly ticks a number of boxes.”

The deal with Avanti will see EE spend an initial $29 million in a multi-year contract, with the option to double the capacity being provided if needed.

Learn more about mobile backhaul at the free Telecoms.com webinar in association with InfoVista: “Mobile backhaul: successfully assuring performance for increasingly complex networks”. Tuesday 17^th May at 10am BST.