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Vecima Networks to Sell a Part of its Radio Spectrum to Canadian Service Provider for $8 Million

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Vecima Networks to Sell a Part of its Radio Spectrum to Canadian Service Provider for $8 Million
August 04, 2011
By Madhubanti Rudra, TMCnet Contributor


YourLink Inc. a subsidiary of Vecima (News - Alert) Networks, has reportedly signed an agreement to sell a portion of its wireless spectrum assets in the 3.5 GHz band to a Canadian wireless service provider.

In a press release, Vecima Networks said that the transaction is structured in two phases. The first phase includes the purchase of 16 licenses, predominantly in Alberta and Ontario. These licenses are being sold for a price of $8 million.

In the next phase, the purchaser can opt to purchase an additional 20 spectrum licenses for a price of up to $11million on or before December 31, 2011.

The licenses sold in both phases together represent approximately 58 percent of

YourLink's current sub-10GHz spectrum asset holdings measured on aMHz-POP basis.

Vecima Networks’ products are used to enable broadband access to cable, wireless, fibred and telephony networks. Vecima claims to incorporate original embedded software into its hardware products. Service providers use Vecima's solutions to deliver services to a converging worldwide broadband market, including what are commonly known as "triple play" (voice, video and data) and "quadruple play" (voice, video, data and wireless) services. Vecima's products are directed at two principal markets: Converged Wired Solutions and Broadband Wireless.

“As we have mentioned on numerous occasions, Vecima's spectrum assets

carry substantial value that is not reflected in their carried value.

This transaction is further strong evidence of that,” CEO of Vecima Networks Dr. Surinder Kumar (News - Alert) noted in a statement while clarifying on the details.

In May, Vecima Networks reported its fiscal 2011 third quarter and nine-month financial results for the period ended March 31, 2011. “In the third quarter, Vecima was in a transition phase where legacy revenue declined and new product revenue had not yet ramped-up. As we announced in April, we have cut expenses and reduced our staff by 18% to facilitate the Company's return to operational profitability. This was the first time in Vecima's 23 year history that the Company was forced to lay-off a significant proportion of its staff. Since June 30, 2010, our headcount has been reduced by 28%. A number of one-time items occurred in the third quarter that adversely affected net income, including a severance charge of $1.5 million and an inventory write down of $1.6 million,” Dr. Kumar stated in an earlier press release.

Madhubanti Rudra is a contributing editor for TMCnet. To read more of her articles, please visit her columnist page.

Edited by Rich Steeves

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