NetComm Wireless profit up 500 percent as it eyes 5G and FttC globally

NetComm Wireless has announced net profit of AU$8 million on revenue of AU$181 million, pointing to future growth across fixed-wireless, fibre to the curb, 5G, and industrial IoT.
Written by Corinne Reichert, Contributor

Australian communications equipment company NetComm Wireless has published its financial results for FY18, recording net profit up 545 percent year on year to AU$8 million while it pointed to 5G and fibre-to-the-curb (FttC) rollouts globally for growth.

Earnings before interest, tax, depreciation, and amortisation (EBITDA) were up 472 percent to AU$20.5 million on revenue of AU$181.7 million, up 69 percent, with AU$188.7 million in receipts from customers.

NetComm made AU$25.2 million in revenue from broadband, and AU$156.5 million from its telecommunications infrastructure equipment and industrial Internet of Things (IIoT) segment.

According to NetComm, the majority of the AU$66 million revenue being generated by supplying network connection devices (NCDs) for the National Broadband Network (NBN) FttC rollout in Australia will be mainly delivered during FY19 following delays caused by pit remediation.

"The group anticipates that NCDs will deliver further substantial value to the group during the FY19 as the pace of the rollout increases, although it is expected sales of the four-port DPU unit launched in June 2017 will be lower given the delays announced by NBN as they embark upon pit remediation for asbestos and backhaul infrastructure that support the FttC program," the company revealed.

NetComm said it is also experiencing growth across delivery of its fixed-wireless technology to AT&T in the United States despite this being "at a pace below that initially expected", as well as to NBN and with "intelligent" fixed-wireless tech for Bell in Canada.

"We were pleased to receive initial purchase orders to deliver our third-generation, 100Mbps-capable fixed-wireless devices to Ericsson for the NBN rural broadband project. In North America, we commenced fixed-wireless device sales to AT&T and signed a contract to deliver devices to a Tier 1 carrier in Canada," NetComm Wireless CEO Ken Sheridan said.

"These North American contracts are part of a concerted push to see rural households receive fast internet connections and are expected to be strong contributors to our future growth."

The Bell Canada contract will see full ramp-up and deployment begin from the second half of FY19, NetComm said.

The company is also planning to launch further IIoT products during the next financial year, saying it "anticipates modest growth", while it is eyeing European opportunities for its FttC portfolio.

Read more: Fibre to the curb: How NBN is delivering its new network

"Building on our success locally, we see substantial opportunities to implement similar large-scale solutions in Europe, where we have already successfully completed three lab trials, with an in-field trial currently in progress," Sheridan said.

NetComm said it will also capitalise on the first use case of 5G deployments being fixed-wireless, as well as on the 5G ban of Chinese networking vendors including Huawei in Australia following political instability last week.

The total addressable 5G fixed-wireless market is worth more than $12 billion, NetComm said in its financial results presentation, with the key markets being North America and Western Europe.

"Chinese vendors already banned from Australia and USA; NetComm ideally placed to fill the gap as western vendor," the company said.

"NetComm has a deep understanding of the complexities involved in implementing large-scale fixed-wireless solutions. With strong partnerships established in global markets, we are well placed to benefit from policy trends that are highly supportive of fixed-wireless in developed markets, where we aim to be early to market with commercial fixed-wireless 5G solutions," Sheridan added.

NetComm had in March announced the launch of a 4G Cat 6 IIoT router, the NTC-400, which comes with dual-band Wi-Fi in addition to its 300Mbps LTE speeds with support for multiple spectrum bands, as well as a cloud-based remote device manager (RDM) platform that allows for real-time analytics, monitoring, profile updates, inventory reports, and reporting on failed tasks and connections.

According to NetComm, the router was "specially engineered to connect and manage some of the most bandwidth-intensive industrial and in-vehicle IIoT applications", including 4K displays, fleet management, and surveillance.

NetComm had in February also announced its 1Gbps-capable intelligent 4G fixed-wireless outdoor device, which it said provides the "world's fastest LTE fixed-wireless broadband speeds".

The Intelligent Fixed Wireless Access unit (IFWA-600) is third-generation technology from NetComm, and is set to be used on the NBN fixed-wireless network later in 2018.

This followed NetComm in December unveiling the world's first FttC NCD, which incorporates a G.fast and VDSL modem and is able to monitor and report diagnostics on the performance of the line going into a premises. It is used in conjunction with NetComm's FttC distribution point unit (DPU), and includes a reverse-power feed allowing the DPU to be powered via the customer's premises.

NetComm reported record first-half financial results of AU$88.6 million in revenue, up 89 percent, and a jump in EBITDA from AU$681,000 to AU$9.2 million, citing its contracts with NBN.

"NBN's a great customer for us, because there's a lot of liaison between them and us in making sure they get exactly what they need," Sheridan told ZDNet in April.

"So we're not in the business of making just products and then hoping to sell them to someone else; we say, 'how would you like it?' and make sure it's a 100 percent fit. So we have a lot of dialogue and we obviously first started with fixed-wireless [with NBN], then moved into distribution point units and into the NCDs ... so we've actually had a great working relationship with these guys."

NetComm CTO Steve Collins had previously told ZDNet that its NCD brings FttC solutions up to the same point that FttP is at, in that it powers the DPU and provides the modem to the end user, with retail service providers then simply connecting them.

NBN had signed NetComm Wireless to supply its FttC one-port and four-port DPUs and related services in November 2016, initially using old VDSL technology. The contract was as a result of NetComm directly tendering for FttC after NBN specifically asked it to take part, Collins told ZDNet last year.

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