Israeli Alvarion to Sign Deal for 4G Network in Canada



By: YOSEF TASTASSA  
Published: October 18th 2010
in Economics » Local

Alvarion's head office in Tel Aviv
Pic: WikiMedia Commons

Alvarion (NASDAQ - ALVR, TASE - Alvarion) is set to sign a multiyear contract with Canadian Barrett Xplore. The deal is for a total of $75M. After deployment of the infrastructure, Canada will have its first national 4G network.

 

Israeli Alvarion, who has been having difficulties recently is smiling again, hoping that the deal with Canadian Barrett Xplore will open the door to more deals and put the Israeli company back on the tracks of profit.

 

Investors also had some relief: After informing the public of the new deal, Alvarion's shares jumped by 46 cents to $2.35 US, about 24 percent, and the company reached a market value of $146M.

 

On Friday, Alvarion closed at the NASDAQ at $2.30 US, a volume of $240 thousand, 20 per cent less than the daily average of approximately $300 thousand dollars.

 

A look at Alvarion's balance sheets, shares value, and long term market performances shows that the company is struggling and will need more than the $75M deal with Canadian Barrett Xplore in order to be profitable again.

 

The behaviour of Alvarion's shares last year shows hopes as well as disappointments. Between May 2009 and May 2010, Alvarion traded at a local peak of around $4 per share with some minor fluctuations. Negative performances (more than expected) and high competition in the wireless market have caused a sharp decline in Alvarion's share from about $4 in May 2010 to $2 a month after. Later on the share dropped to only $1.78. Alvarion's shareholders lost over half their money in only a month.

 

Financial Reports to Fiscal Year 2009 (Figures in thousands of $US)

 

Total Revenue – $245,239

 

Cost of Revenue – $128,461

 

Gross Profit – $112,785

 

Total Operating Expenses – $126,365

 

Net Income – ($7,188) Loss

 

About Alvarion

 

Alvarion was established in 2001 with the merger of BreezeCOM and Floware, two leading broadband wireless access equipment developers offering point-to-multipoint broadband wireless access solutions. Since both companies complemented each other in terms of product offering, geographical presence, customers and distribution channels, the merger enabled Alvarion to become a major player in the broadband wireless access market.

 

Alvarion viewed the birth of the idea for WiMAX in the wake of the telecom bubble in 2002 as a new window of opportunity for broadband access. Realizing the potential of WiMAX to reduce prices and integrate better technologies, such as NLOS and OFDM, as well as increase capacity, the company became a founding member of the WiMAX Forum®, the regulatory body established to smooth the way for WiMAX regulatory and certification issues.

In 2003, Alvarion purchased Innowave, a company with extensive experience in carrier grade data and voice solutions and an extensive roster of customers. The company also announced a strategic collaboration with Intel for the development of a WiMAX chip and system. This was followed by the commercial launch of the BreezeMAX 3500 in 2004, and the live showcase of BreezeMAX Si (self-install CPE) with Intel’s WiMAX chip in 2005.

 

For more information, visit Alvarion’s website at www.alvarion.com



Related articles: (Alvarion, 4G, Barrett Xplore)
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