First profit for Openet as lawsuit delays flotation
OPENET TELECOM posted its first profit last year as turnover grew almost 50 per cent to €46.1 million and the company says it is still planning for a Nasdaq flotation.
The software company, whose customers include ATT, Orange, Verizon, Vodafone and Telstra, posted a pre-tax profit of €1.2 million compared to a loss of €2.3 million in 2008, in accounts seen by The Irish Times.
Chief executive Niall Norton said Openet had planned to be “IPO ready in 2011” but this would be delayed due to a lawsuit filed by Amdocs, a much larger Israeli competitor, in the US courts.
Amdocs has filed initial papers in a Virginia court claiming patent infringement.
“The board have considered the matter very, very carefully,” said Mr Norton.
“Their position is we remain on track for an IPO and with the full confidence of the board.”
If a flotation is delayed, Mr Norton said the company would consider going to its shareholders for bridging finance.
Openet has been backed by Balderton Capital, SAIC Venture Capital and Cross Atlantic Capital Partners, and has received support from Enterprise Ireland.
Openet favours listing on New York’s Nasdaq exchange because the financial community there better understands its business model.
Openet’s software allows telecoms companies and other service providers such as cable television companies to better manage their subscribers and bill them for data services.
For example, a major US carrier is using Openet’s software to sell ad-hoc and recurring data plans to iPad customers, which can be purchased directly from Apple’s tablet computer.
Mr Norton said revenue growth was being driven by the explosion in mobile data usage, an internal re-focus on “selling solutions rather than products”, and Openet’s ability to deliver these tailored products in a “factory-like” manner.
The move to fourth generation high speed networks is also generating opportunities for the company.
“ATT is spending the equivalent of Irish GNP in three months on its 4G network, and Openet’s systems are at the core,” said Mr Norton.
He said the company expected to increase revenues in 2010 to around €75 million.
Despite reports earlier this year that networking giant Cisco was interested in acquiring Openet, Mr Norton again stated that the company was not for sale.
“We want to be a $500 million company, then a $1 billion company,” he said.
Openet has developed a very successful relationship with Cisco, he continued, but it has similar relationships with IBM and Juniper Networks. IBM yesterday highlighted Openet as one of its key partners in its strategy regarding cloud computing for service providers.
Openet has over 600 staff, of whom 220 are based in Ireland – where its principal research and development is carried out.