JDS Uniphase Corporation (JDSU) received a contract from Saudi Arabia-based telecom operator, Saudi Telecom.
As per the contract, JDS Uniphase will offer extensive IPTV service to Saudi Telecom customers. The service will help Saudi Telecom to identify and resolve IPTV service and network quality issues as well as offset complex procedures.
JDS Uniphase will also conduct other services such as consulting, project management, product maintenance and training services along with integration and customization of third-party products.
With the advent of 3G and 4G networks, the demand for IPTV is expected to increase in the coming years. As per the industry researchers, it is believed that IPTV subscribers will grow at a compound annual rate (CAGR) of 5.7% from 2010 to 2015.
In the years ahead, we expect that cable televisions will be replaced by the new IPTV. Hence, Saudi Telecom seeks upgradation in order to provide better services to its clients.
Despite strong competition from companies like Avago Technologies Limited (AVGO) and Finisar Corporation (FNSR), we remain highly optimistic regarding the success of the company’s product portfolio targeting next-generation technologies including IPTV, wireless backhaul, 4G LTE networks and 40 Gbps and 100 Gbps optical network systems. Management is doing well regarding cost control and cash preservation, in our view.
We, thus, maintain our long-term Neutral recommendation for JDS Uniphase Corporation. Currently, JDS Uniphase Corporation has a Zacks #2 Rank, implying a short-term Buy rating on the stock.
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