Alvarion's Niche Beginning To Take Shape?

Nov.17.06 | About: Alvarion Ltd. (ALVR)

Alvarion (Nasdaq: ALVR) clearly has a good management team in place at present, the best products in the field, but no clear niche as yet, as the argument over WiMAX drags on.

Last week Alvarion changed direction yet again, and appeared to be on the rise. What happened? As far as is known, the management appeared at two conferences in the US since the beginning of the month, and this may well have had an effect. I nevertheless found something that could explain the revival of interest in WiMAX, called Katrina. Does the name ring a bell? Katrina was the hurricane that left a trail of devastation across Louisiana, Alabama and Mississippi. It turns out that the Americans examined all aspects of the coordination between the various rescue services and concluded that these must be improved. This is not any old coordination we’re talking about here, but one between military authorities, rescue services and local authorities.

The result of the mayhem that ensued in the aftermath of the hurricane is that the special military civil support task force, in cooperation with the top brass, decided to enter the WiMAX field, and if this reaches fruition, WiMAX will get the biggest push it has received to date. Why WiMAX? The need for a system of this kind came about after military units arrived at the disaster area and tried unsuccessfully to roll out conventional telecommunications networks.

The regional command has now launched a new plan for a “Wireless for the Warfighter” (W4W) network. The network, whose roll-out is already underway, includes WiMAX systems based on 802.16d and 802.16e standards. There are still problems with protecting the information that will be relayed to military forces over these networks, but large sections of the US Army are now switching to wireless and WiMAX standards.

Will all of this be of any help to Alvarion? It’s difficult to tell, but many investors apparently believe that this niche is now beginning to take shape.

ALVR 1-yr chart:


Published originally by Globes [online], Israel business news -
© Copyright of Globes Publisher Itonut (1983) Ltd. 2006. Republished on Seeking Alpha with full permission.