Alvarion focuses on government, enterprise as path to profitability

WiMAX vendor Alvarion said it plans to slash jobs and other expenses to stem its losses and return the company to profitability by mid-2011. The vendor posted a loss in the fourth quarter 2010 amid lower sales. Alvarion also said it will focus more heavily on growth in government and enterprise markets.

Alvarion President and CEO Eran Gorev characterized the first quarter as a transition that will see the company restructure and slash costs while making some strategic investments.

"We will begin with an immediate head count reduction as well as other related expense reductions," Gorev said in a statement. "Our goal for 2011 is to bring blended gross margin to the high 30s with operating expenses below 35 percent of revenues on a quarterly basis, and to lay the foundation for sustainable growth from a lower, but profitable, revenue base beginning in the second quarter."

The company has yet to disclose how many jobs will be cut. It employs 800 people.

Reuters, quoting an Alvarion spokeswoman, reported that Alvarion is targeting government and enterprise markets since pricing pressure is not as prevalent as it is in the carrier market. The spokeswoman said Alvarion will now focus on growing profit over revenue.

The fourth quarter saw Alvarion reporting a net loss per share of 18 cents, compared with a profit of 1 cent in 2009. Revenue decreased 16.6 percent from a year ago to $50.3 million.

Last month, the company's stock received a boost when Israeli newspaper Globes reported that Alvarion may be on the verge of a deal with India's largest 3G mobile operator, Bharat Sanchar Nigam Ltd., which is expected to deploy WiMAX in 760 cities nationwide this fiscal year.

Still, analysts are pointing to the fact that operators are choosing LTE over WiMAX, and they are questioning whether a focus on government and enterprise are enough to turn around the fortunes of Alvarion. The vendor struggled throughout 2010, citing delays in numerous large projects. In May, the vendor announced it would downsize its workforce.

For more:
- see this Reuters article

Related articles:
Report: Alvarion may get a boost from India's BSNL
Alvarion wins Italian WiMAX deal, but reports poor Q3 results
Alvarion slashes jobs as major WiMAX contracts stall

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