Wavenet’s $6.5m deals

Shares in Perth-based modem and wireless hardware manufacturer Wavenet have traded higher in the past month after the signing of contracts with international customers that take its 2005-06 order book to more than $6.5 million.

Its latest supply order with US remote vehicle diagnostics company Networkcar is expected to bring in $3.75 million over an 18-month period, Wavenet chief executive Steve Metlitzky said.

San Diego-based Networkcar sells vehicle monitoring systems, with customers including the US government and military for fleet car applications.

Wavenet’s wireless Mobitex modem device will be incorporated into Networkcar’s Automatic Vehicle Location (AVL) technology, which is positioned inside a vehicle. The modem will help the device communicate with a base station monitoring the vehicle.

Under the exclusive agreement with Networkcar, Wavenet will supply an initial order of 10,000 Mobitex modems.

Mr Metlizky said he expected a decision on a further 20,000 units by early next year.

The Networkcar supply deal comes a week after the company signed an exclusive agreement with Israel-based wireless point of sale device developer, Lipman.

Under that agreement, worth a potential $2.5 million in annual revenue, Wavenet will supply Lipman with about 20,000 modems a year initially until the end of 2006.

Mr Metlitzky said it was pleasing to see the company begin to sign some orders consistently.

“We’re starting to see some stronger evidence that the company can deliver more continuous revenues now,” he said.

Wavenet shares jumped three cents to 16.5 cents following the announcing of the Networkcar agreement.

With shares hitting a 12-month high of 28.5 cents, Mr Metlitzky said it will take a number of consistent deals to improve the value of the company’s shares, which approximately value the company on its assets alone.

Founded in 1997, Wavenet listed on the Australian Stock Exchange in 2000 and is a primary supplier to the US wireless modem market.