Alvarion -- playing the role of jilted lover -- is justifiably perturbed by the announcement yesterday that Nortel is "refining" their carrier focus.
By refining, Nortel is saying that the company "...has decided to discontinue its mobile WiMAX business and end its joint agreement with Alvarion Ltd."
By refining, Nortel is saying that the company "...has decided to discontinue its mobile WiMAX business and end its joint agreement with Alvarion Ltd."
Breaking up is never fun.
And so, in response to being jilted, Alvarion is reportedly "analyzing the details of actions it will take to mitigate the impact on its business, and expects to provide more information about these actions during its fourth quarter 2008 financial results conference call on Wednesday, February 4, 2009."
According to a release issued by Alvarion, the strategic agreement, entered into in June of last year calls for:
...among other things, the resale by Nortel of the Alvarion platform of WiMAX access products and Nortel's contribution of resources and funding to accelerate Alvarion's development of its portfolio of WiMAX base stations. Under the terms of the agreement, Nortel is obligated to pay Alvarion for certain research and development services beyond Q4; however, collection of these payments is uncertain and subject to Nortel's creditor protection proceedings.
Alvarion is figuring out what the next steps will be, but in the meantime, President and CEO Tzvika Friedman is sounding all the right notes:
We are obviously disappointed in the direction this has taken; however, Alvarion's industry position has never been stronger. In Q4, our WiMAX shipments, excluding Nortel, reached a record $54.4 million and WiMAX revenues were $42.3 million. Our book-to-bill remained well above 1, and we ended the year with over $140 million in cash on our balance sheet.
During 2008, we won numerous major WiMAX deals, both directly and with various partners. We have proven time and again that we can win against all types of competitors, large and small, and we have demonstrated our ability to implement turnkey projects with complete end-to-end solutions. On the February 4th call, we will provide more information about our strategy to mitigate the impact of the Nortel situation on our operating expenses in 2009. Meanwhile, our priority is to minimize the effect of Nortel's decision on our joint customers.
Stay tuned for the next installment of as the market churns....
