Nera Telecommunications Ltd - What is its strategy to compete in ever more competitive markets?

5/11/2013 – When Nera Telecommunications reports Q3 earnings on Thursday (November 7), investors will pay close attention to how its outlook commentary three months ago has translated into revenue and profit.

Back in August, it said competition across its telecommunications and infocommunications businesses remained stiff, as operators were becoming even more cautious with their spending.

In its telecommunications business, Wireless Infrastructure Networks (WIN) was to enjoy growth from more mobile users, broadband services and standards compliance.

More effort was to be made to promote WIN products to the defence, broadcasting and utilities markets.

Also under telecommunications, a new satellite communications business will be sought while land, marine and handheld satellite terminals are sold to current clients.

For its infocommunications business, growth in smart devices, internet, web services and compliance will drive the Network Infrastructure business when service providers build, expand or upgrade their networks.

IT spending from enterprise and government sectors was to rise.

The Group said it would continue to focus on providing IP, optical and broadcast network infrastructure products.

The Infocomm Network Infrastructure business itself is already facing keen competition from local resellers, distributors and system integrators, and even some global equipment vendors.

Also under infocommunications, the Payment Solutions business faces very localised and fragmented competition with many local payment infrastructure and services vendors offering various payment products and solutions.

It gave this outlook commentary along with second quarter results, which show revenue and profit growing.

Investor Central. Asian insights for global investors. We ask the tough questions of Asian companies which global investors need answers to.

Question

1. What is its strategy to compete in ever more competitive markets?

It's great to see strong order flow, but can it maintain its margins?

Question

2. Is the growing order flow continuing?

In the Q2 results, it disclosed it had received more orders in all areas of business in the first half of 2013 than in the same period last year.

It got S$44 mln worth of new orders for telecoms, compared to S$38.9 mln last year.

It received orders for S$77 mln in infocomms equipment, up from S$60.9 mln in the first half last year.

New network infrastructure orders amounted to S$55.3 mln, up from S$42.9 mln.

Payment solutions orders amounted to S$21.7 mln in the first half, compared to S$18 mln in the same period last year.

Question

3. What is the total order book?

A total order book figure was not provided.

(Total:10 questions)

We have not sent these questions to the company yet, in anticipation of their Q3 results this Thursday.

We will revisit these questions once the new results are out.

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