An Israeli competitor appears to have taken a chunk out of DragonWave Inc.'s business with U.S. high-speed Internet provider Clearwire Corp.
Ceragon Networks Ltd., a wireless Internet technology provider based in Tel Aviv, picked up total revenues of US$53.4-million in their fourth quarter, Kris Thompson with National Bank Financial said in a note.
"We believe Clearwire was a 10% customer for Ceragon in the fourth quarter, however, Ceragon did not suggest this level of revenue should be expected in subsequent quarters," he said.
While Ceragon expects 2010 revenues in the the range of US$239-million to US$248-million, the company sees the Asia-Pacific market as its primary revenue driver.
As for DragonWave, Ceragon may be considered an "important competitor" but Mr. Thompson maintains an Outperform rating and C$17 target price for the well-regarded Canadian company.
"Ceragon does not appear to be a major threat to displace DragonWave at Clearwire over the near-term," he said. "The main investor concern is and should be customer concentration with Clearwire."