Reports in Australian website “iTWire" imply that Alvarion Ltd. (Nasdaq: ALVR; TASE: ALVR) is participating in the “Australia Connected” project for broadband deployment throughout the country, including remote rural regions.
Australia Connected will cost AU$1.9 billion (US$1.6 billion), of which the Australian federal government will provide AU$958 million and OPEL networks pty Ltd., a joint venture of Optus pty Ltd. and Elders, will provide AU$917 million. Optus is a subsidiary of Singapore Telecommunications and Elders provides telecommunications services in rural areas. Alvarion is a supplier of WiMAX broadband wireless solutions. “iTWire” reports, “According to a ‘fact sheet’ on the OPEL Networks proposal, OPEL has indentified world-leading WiMAX vendor, Alvarion, as its provider of choice.”
“iTWire” says that the Australia Connected project aims at ensuring at least 12 megabits speed broadband communications to 99.9% of the population by June 2009. Australian government stipulates that the broadband services will be delivered via a mix of fiber optic, ADSL2+ and WiMAX, and OPEL has chosen fixed WiMAX. 1,361 WimAX stations are planned to be built in rural areas.
Optus has previously worked with Alvarion in other projects. Australia Minister of Communications Helen Coonan toured the company during a visit to Israel a few months ago. Optus has also worked with Gilat Satellite Networks Ltd. (Nasdaq: GILT; TASE: GILT) and Ceragon Networks Ltd. (Nasdaq: CRNT; TASE:CRNT). Last year, Gilat provided Optus with its satellite communications terminals for rural areas in Australia and New Zealand, and Ceragon has supplied the company with its backhaul solution.
“iTWire” has not said how much Alvarion’s share in the Australia Connected project will be, but it can be assumed to be fairly large. Alvarion posted $52.1 million revenue for the first quarter of 2007, including $25 million from the sale of WiMAX solutions. The company’s 2007 revenue growth target is 10-15%, and 50% growth for WiMAX. The company’s 2008 revenue growth target is 30-40%, and a further 50% growth for WiMAX.
Telstra Ltd. (NYSE, ASX: TLS)., which lost the Australia Connected tender, has raised questions about the technological reliability of WiMAX. “The Sydney Morning Herald” reports that Telstra CTO Dr Hugh Bradlow sent a letter to Australian MPs in which he listed a number of grievances with WiMAX technology and in particular its radio-based system. He wrote, "While the WiMAX technology may have a theoretical limit of 50 kilometres, this requires a clear line of sight between the base station and the user's antenna. Realistic coverage ranges from the base station are likely to be much less than that. By contrast, Telstra has tested its NextG network solution up to 200 kilometres (with line of sight) from that base station."
“Australian IT” reports that “some industry players are concerned that although the technology is sound, the way in which it may be applied by the OPEL consortium may render it less effective.” It quotes Alvarion marketing director Asia Pacific Lior Misham as saying in response that his company's technology had solved the problems of interference in unlicensed bandwidth.
In a separate article, “Australian IT” quotes Elders telecommunications general manager Jason Horley as saying, "We haven't gone out with a formal tender yet, but Nortel is there, Alvarion is there, Nokia-Siemens is interested. There is a pretty wide variety of players."
Alvarion president and CEO Tzvika Friedman said in response today, “"Alvarion is pleased that the Australian government is supporting WiMAX and congratulates OPEL for being awarded such a visionary project. This decision marks another important milestone in the adoption of WiMAX and further validates its suitability for a variety of applications, from bridging the digital divide by providing primary broadband access in underserved areas, to enabling innovative new personal broadband services."
Published by Globes [online], Israel business news - www.globes.co.il - on June 28, 2007
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