Ceragon unveils a new wireless backhaul solution for enhanced security

9 August, 2016

The new FibAir20 assured Platform targets a yearly $220 million market. Declining Q2 sales lead to a 16% decline in Ceragon’s share price

The new FibAir20 assured Platform targets a yearly $220 million market. Declining Q2 sales lead to a 16% decline in Ceragon’s share price

Ceragon's FibeAire product family
Ceragon’s FibeAire product family

The new system is based on Ceragon’s IP-20 Platform, which earned FIPS 140-2 validation by the US National Institute of Standards and Technology (NIST). IP-20 is a service-centric microwave platform for HetNet hauling. Powered by a software-defined engine and sharing a common operating system, CeraOS, the IP-20 platform delivers ultra-high capacities while supporting any radio transmission technology, any network topology and any deployment configuration.

The IP-20 Assured Platform is available across all wireless backhaul frequencies from 6 to 86 GHz and is available across all wireless backhaul frequencies from 6 to 86 GHz.It offers highly redundant and secured wireless backhaul with over-the-air encryption. The Platform strives to enable network operators to meet service availability demands by providing physical and virtual security, advanced identity management, as well as a secured product architecture – all which are FIPS 140-2 validated.

A disappointing earnings report

CERAGON-STOCKIn Q2, Ceragon’s revenues totaled $70 million, a 26% decline compared to the same quarter last year. The company has reported an operational profit of $4 million compared to $5.9 million last year. Following the release of the disappointing report, the company’s share collapsed by more than 16%, cutting Ceragon’s market cap to a mere $153.7 million.

According to Ceragon CEO, the downtrend is expected to change in the near future, mainly due to the expected surge in 4G LTE deployment in emerging markets. “higher bookings are being driven mainly by customers in India and Latin America, mainly Mexico. While the 4G LTE network build-out has peaked in most of the developed markets, it is still in early stages in the emerging markets. We continue to generate positive cash flow and we used a portion of our healthy cash position to further reduce our debt; however, the headline of today’s call is the improvement in our bookings during Q2”. Said CEO Ira palti.

Lucrative opportunities in the public security market

The FiberAir IP-20 platform launched in 2013 was considered revolutionary at the time. It was the first backhaul solution enabling customer SDN capabilities for managing wireless networks. The novel solution was based on two unique features developed by Ceragon: the integration of a powerful communication processor and the CeraOS operating system, which streamlines wireless backhaul network modernization, operation and management.

CEO Ira Palti
CEO Ira Palti

One of the main goals of the new product family is to supply a solution for HetNet problem. HetNet’s are extensive mobile networks comprised of large and small cellular cells, which are designed to maintain communication in remote and rough terrains. Most of today’s mobile networks are to some extent HetNet’s.

“Ceragon recognizes its customers’ growing needs for secured wireless backhaul and is committed to providing reliable, innovative solutions that meet the highest security standards,” said Ira Palti, president and CEO of Ceragon. “Our IP-20 Assured Platform was designed to enable the highest value for our customers. It helps homeland security, utility companies and service provider organizations keep their networks always available and secure, so they can deliver on their mission – keeping users connected.”

A promising, yet slow Market

Palti  estimates the global market for secure backhaul solutions totals around $220 million a year, including products and services. Ceragon intends to focus on the U.S. initially, which represents about 45% of the total market, using the new product to enhance its position and enable it to gain share from competitors. Sales cycles can be quite long in this market, so it will take some time for revenue from the IP-20 Assured to ramp.

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