Ethernity Networks shares surge as signs USD4.6 million contract

(Alliance News) - Ethernity Networks Ltd on Tuesday said it has signed a follow-on contract with an existing customer worth USD4.6 million.

Shares in the Israel-based network data processing technology provider were trading 35% higher at 14.16 pence each in London on Tuesday morning.

The customer, a Chinese broadband network original equipment manufacturer has operations in India and China. An OEM provides products that are used as components in the products of another company.

The contract concerns the supply of devices enabling fiber-to-the-room deployment.

Fiber-to-the-room is a "disruptive trend" that uses passive optical fiber to reach residential, retail, enterprise and automotive deployments. Bringing fiber into individual rooms enables users to have "unmatched levels of service." Passive optical fiber deployments provide "greater reliability than WIFI" and a "greener and more power efficient solution than traditional copper cabling", the company said.

The customer is an existing customer of Ethernity. The new contract brings the total value of contracts signed with the customer to USD7.6 million.

Revenue from the new contract is expected in 2023 and 2024. The company notes it will make a "significant contribution" to 2023 revenues.

Chief Executive Officer David Levi said: "This deal confirms our prior expectations that Ethernity's contract wins would lead to follow-on business. We are extremely pleased with the advances we have made on a deployable passive optical network product with this OEM customer, and we are excited to begin work on this extended offering for the new fiber-to-the-room market.

"This is a totally untapped market for Ethernity that utilises our existing 5G infrastructure technology to serve a major connected residential market. I believe this is the tip of the iceberg in this growing market for the Company and has the further potential to generate additional significant revenue flows."

By Chris Dorrell; chrisdorrell@alliancenews.com

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