Andy Obermueller
Government-Driven Investing
Keith Fitz-Gerald
New China Trader
Marvin Appel
Systems & Forecasts
Jim Powell
Global Changes & Opportunities Report

Four plays on 4G: The data logjam


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 "Usage and demand for wireless data services is surging; according to the US FCC data use has soared by over 700% in just the past four years alone," says Neil George.

In his Stocks that Pay You, he says, "We suggest you look at four companies involved in different aspects of the developing 4G network, which will provide for easier handling of more data, particularly in mobile devices."

"The FCC is projecting average growth in demand running at over 130% each year, even without any new developments or new products.

"The data logjam doesn't have to be a problem for you; just invest in the companies that are going to make it possible for iPhones, BlackBerrys, Droids, Palms and every other smart phone - to actually work.

"And when it comes to improving performance for data-hogging iPhones as well as every other smarter phone, netbook, laptop and numerous other newer devices - having a better network is going to be the key.

"This is why even the major rivals with night and day differences in how their networks run - AT&T and Verizon - are joining together to work on a common new network.

"The solution is to move to what is termed LTE or Long Term Evolution, which is based on the underpinnings of GSM (Global System for Mobile communications). Also referred to as 4G, this next level will provide for easier handling of more data - particularly in mobile devices - with more efficiency and hand-offs from tower to tower.

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"In addition, LTE is also one of the better solutions for utilizing existing spectrum not just for urban areas - but also for rural needs, rivaling a much more limited technology for fixed devices known as WiMax.

"The leaders that have designed and built the systems needed to run LTE are all ramping up. For not only are the big telecoms needing their stuff, but there are also some other developments beyond the current data crunch that will speed up LTE's rollout.

"First, the government is finally beginning to ramp up the provisions of legislation passed and signed by the former president in 2005 providing support for rural broadband data access. With limitations on fiber and other cable as well as satellite transmission - wireless data systems fit the bill quite well for Federal dollars.

"Second, the biggest phone company, AT&T, wants to get out of the traditional phone business. And get this: AT&T is actually pushing and lobbying the FCC to end traditional land line phones. AT&T wants to end providing traditional phone service and in turn - wants to only offer VOIP (Voice Over Internet Protocol) phones - which works by turning voice into data, further crowding existing systems.

"Third, right now roughly only 10% of the spectrum that can carry current and LTE data and VOIP phone traffic is actually allocated for these services. Most is either not being used - yet controlled by the FCC - or is being used under license by broadcasters, satellite media companies, and by the US government.

"Ramping up a common wireless data network for communication that would provide everything from simple phone calls... to streaming video... to all of those thousands of Apple Apps... as well as billions of BlackBerry emails... would solve a lot of the nation's challenges.

"Many of the leaders are newer to the market or are not yet publicly held. They're founded and staffed by many of the veterans of the big tech companies - but now are fully focused on their finely honed market of making the stuff to make LTE work.

"However, on the public side - there is a selection of companies worth poking around and eventually nibbling at for your portfolio. In particular, there are four stocks at forefront of LTE that I want you to take a peek at.

"First you need antennas that will work with both the current systems and the newer LTE. One of the leaders is Powerwave Technologies (NASDAQ: PWAV).

"This company is burning through cash, investing and developing its technologies - but with cash and capital it continues to ramp up its capabilities and continues to book current and pending contracts.

"Second, after you get the antennas up - you'll need the base station to process and run the network. One of the primary base station developers is Israeli-based Radvision (NASDAQ: RVSN).

"This company focuses on converting and processing both voice and data into transmission-able bits that make networks actually work. Without this - no iPhone or Blackberry would work beyond being a nice paperweight. No debt, lots of cash and eager customers at the ready.

"Third in the set up of the new network will be the actual switching and processing of voice and data including all of the streaming videos that iPhone users love and demand ever more of.

"One of the leaders in this market is Allot Communications of Israel (NASDAQ: ALLT). The company has soaring contract sales and no debt.

"And the fourth area of need to facilitate AT&T's desire for VOIP on LTE is the company that focuses specifically on the needed technology. Based in Shenzhen China - ZTE Corp. (Other OTC: ZTCOF), which also trades both on the Shenzhen and Hong Kong exchanges."




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