Alcatel to sell BATM equipment worldwide

The deal could substantially boost BATM's sales. It may affect first quarter revenue, but the real impact will be in the coming years.

Hadass Geyfman 7 Apr 04 16:01

Sources inform ''Globes'' that BATM Advanced Communications (LSE:BVC) has signed a contract with major communications equipment supplier Alcatel (NYSE:ALA) for worldwide distribution of a portion of BATM's product range. The specific product is BATM's T-series router switches, sold in Europe under the Titan brand name, intended for next generation broadband IP communications networks.
Industry sources believe that the deal has enormous potential, and can be expected to vastly increase BATM's volume of sales. The contract, the sources say, could amount to perhaps tens of millions of dollars over the coming years, although this is dependent on the size and number of tenders in which Alcatel will offer BATM equipment.

Sources also inform ''Globes'' that initial revenue on the contract will already have an effect on BATM's first quarter 2004 report, but the real impact can be expected in the coming years.

Alcatel already offers BATM equipment to its clients worldwide, along with its own equipment, services and maintenance, under the brand name Telco Systems. In fact, BATM's $230 million acquisition of Telco Systems in 2000 is one of the factors driving the current deal.

"The most important achievement in this deal is that, from now on, Alcatel will be selling BATM router-switches all over the world, and integrating them into its broadband and IP networks," an industry source said to "Globes".

BATM has not yet received exclusivity, but sources in the communications equipment sector say that the deal has already begun to yield results, as Alcatel has already included BATM equipment in several major international tender bids. Alcatel recently won a Turk Telekomunikasyon (Turk Telekom) contract that includes BATM equipment.

Moreover, the bidding process is currently on for a major Southeast Asian contract worth several hundred million dollars. Sources inform ''Globes'' that Alcatel again included BATM equipment as part of its offer. Alcatel recently made the list of the final bidders for this contract, and now, after most of the other contenders have been winnowed out, only Alcatel and Cisco Systems remain. Capital market sources believe that the contract will be awarded in 2004, and equipment will begin to be supplied in 2005.

Telco Systems' client list includes most US communications operators. According to an electronics industry source, in can be assumed that Alcatel and BATM's systems were integrated for the purposes of winning the contract.

BATM recently signed several important contracts to supply its router-switches, including a major contract with Nokia (NYSE; LSE: HEX:NOK) and another contract with a major integrator. Similarly, BATM signed a contract with the Israeli Defense Forces (IDF) to supply switches for the IDF communication network that will work in tandem with Juniper Networks (Nasdaq:JNPR) switches.

BATM's major shareholders are BATM CEO Dr. Zvi Marom (30%), JP Morgan Partners (10%), Deutsche Bank (7%), Merrill Lynch (6%), 3M Corporation (5%), Sun Microsystems (Nasdaq:SUNW) (5%), and private investors.

Marom declined to comment on this report.

Published by Globes [online] - www.globes.co.il - on Wednesday, April 07, 2004





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Hadass Geyfman
PerSay valued at $2.9-3.7m
07.04.04

SFK Technologies will continue injecting capital into the voice ID company.







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alcatel Q1 update tomorrow. will hopefully update on contracts which have been on-going.

Batm at CeBit on the 25th with the agm as well. A deal will be announced at cebit, hopefully thr far east deal.