ASX-listed networking vendor NetComm has wrested an ADSL hardware supply contract with ISP iPrimus from rival D-Link in a deal expected to earn $5 million a year.
David Stewart, managing director at NetComm, said US vendor D-Link had previously supplied ADSL hardware to iPrimus, which claims to be Australia's third largest ISP. Although it was difficult to estimate the worth of such a contract, he said, NetComm believed the supply deal could increase its annual revenues by around $5 million.
'We have been working on this account for about two or three months to win it. We have just started shipping recently. The first shipments went last month, so it's been a long, aggressive battle,' Stewart said.
Under the terms of the contract, iPrimus would include NetComm's NB1300 ADSL routers and NB1200 ADSL USB modems in its broadband package for residential and business customers, he said.
'That's the current range, but as we bring out new models we will also offer those to [iPrimus]. [But] the NB1300 has been through extensive and exhaustive testing and modifications of code, so I think that will perform for them for a while.'
Stewart claimed that iPrimus, which had 'strict network specifications', had also favoured the NetComm hardware because it had security features that preserved user information integrity while protecting the wider network.
He said that the deal was 'one of a few' expected to fuel NetComm revenue growth on the back of the Australian company's strong results for the 2002-03 financial year just reported.
NetComm then attributed its fourfold lift in net profits to $1.13 million for the year ended 30 June to increased sales of ADSL equipment.
Stewart told CRN at the time that demand for ADSL products had grown to represent 38 percent of the company's revenue for August alone, up from six percent of revenues in the same month last year. The figure was growing monthly, he claimed.
Stewart said the company was working on several projects and new products expected to reap significant deals as the year progressed.
For example, NetComm has developed a software program called EasyConfig that the company claims will significantly lower support costs for ISPs.
'It simplifies the whole set-up picture and support costs will go down to blazes,' he said.
Stewart claimed a number of ISPs, including iPrimus, had already shown interest in EasyConfig, although at least one had complained about a related 50 cent rise in the hardware costs.
He said that NetComm had always seen ADSL as suitable for business use. 'I always thought it was a business technology first because of the speed and availability,' Stewart said.
D-Link was contacted for comment on the iPrimus deal but had not called back by press time.
Issue: 315 | May 2013
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