The mobile WiMAX deal Alvarion announced today with a Tier 1 telecommunications company, believed to be France Telecom, is one that investors have waited a long time for. "We competed against all the big players in this tender, Motorola, Alcatel, and Nortel among them," Alvarion president and CEO Tzvika Friedman told "Globes" today. "This is one of the projects we meant when we spoke in our conference call of projects that would be worth more than $20 million."
Friedman says the deal is with a telecommunications provider active in many countries, both in fixed-line and wireless, and that it has holdings in other companies around the world. Under the agreement, each company in the telecommunications group that wishes to deploy a WiMAX system will work with Alvarion as its equipment supplier.
"This agreement is of very great importance, because the selection process was a very long one," Friedman says. "We competed against big names and proved our ability to win a strategic tender. This is important, because there were fears on the market over Alvarion's ability to compete against much larger companies. We proved ourselves through our technological superiority, with our Open WiMAX, and through the company's commitment."
Alvarion has a market cap of about $560 million on Nasdaq and the Tel Aviv Stock Exchange. In the past few months, the stock price has fallen almost 40%, after soaring 120% in the first nine months of this year. The negative sentiment on the part of investors has mainly been explained as stemming from the delay in the WiMAX project of US telecommunications giant Sprint.
"The market didn't change when Sprint's CEO was fired, nor when Cisco bought Navini," Friedman says. "On the capital market, things did change, at least for us. I expect Sprint's new CEO to dispel some of the uncertainty, and that could give a push to WiMAX, and generate momentum both on the "real" market and on the capital market."
Another large WiMAX project expected to get underway shortly is in Australia, where OPEL, a joint venture of Optus and Elders, won an Australian government tender for providing broadband services in isolated parts of the country by 2009. Alvarion has worked with OPEL in the past, and it is now participating in tenders for the supply of equipment to the project. Australia recently underwent a change of government, and questions have been raised about the project. Friedman believes the matter will become clear soon, and points out that some estimate that the project will be accelerated.
Alvarion is also focusing efforts on Taiwan, where six companies have received WiMAX licenses. "We have said in the past that we hope to work with at least one or two of these companies, and we're working hard on that," he says.
Published by Globes [online], Israel business news - www.globes.co.il - on December 19, 2007
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