Yesterday Sequans Communications (SQNS) announced that the new LTE semiconductor technology the company has been working on was approved by China's Ministry of Industry and Information Technology. This breakthrough comes at a critical time for SQNS after a less than stellar recent quarter. SQNS reduced outlook and guidance due to a slowing in the Wimax market. Revenues were still strong last quarter but the reduced expectations have unjustly punished this company too much.
For several months SQNS has been undergoing testing to receive approval for the use in the growing LTE China market. China Mobile is expecting to start rolling out large scale trials and future commercial deployments of its LTE service over the next year. As China continues to grow its middle class, it remains the largest market for cell phones around the world.
SQNS continues to expand as an international player in the LTE networks around the globe. Just recently the same LTE chip was adopted by NetComm, a device maker recently selected to provide LTE devices for a major national LTE network in Australia.
Old Wimax sales produced $.87 in revenues last quarter, and I think we will see a significant jump in revenues over the next year or two. I would recommend taking a small position in this stock and putting it away for some time. I purchased my small stake this morning at a price of $4.51.
Disclosure: I am long SQNS.