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Airvana Wins Major Sprint Femto Deal

Dan Jones
LR Mobile News Analysis
Dan Jones, Mobile Editor
7/8/2009
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Airvana Inc. has won a major contract to supply Sprint Corp. (NYSE: S) with 3G femtocells, the company revealed in a filing with the Securities and Exchange Commission (SEC) .

Financial analyst house Avian Securities LLC issued a research note this morning following the filing, noting that Airvana has signed a "master purchase agreement" with Sprint to supply the carrier with its 3G "HubBub" CDMA femtocells through December 2014.

The news isn't altogether a surprise: Unstrung named Airvana as one of the main contenders to win the contract when Sprint said recently it would beat AT&T Inc. (NYSE: T) to the punch with a 3G home base station. (See Sprint: We'll Beat AT&T to 3G Femto.)

Sprint has offered customers a 2G Samsung Corp. femtocell since 2007. These early femtocells only helped to improve voice coverage in a user's home. The new tiny Airvana CDMA Evolution Data Only Revision A 3G models will also help to improve data downloads and uplinks in the customer's humble abode. (See Sprint Goes Femto.)

Airvana is expecting to launch its own HubBub models later this year. It has also licensed the technology to a number of partner vendors. (See Airvana's Femto Flavors.)

Sprint hasn't yet said when it will introduce a 3G femtocell.

Sprint's major CDMA rival in the U.S., Verizon Wireless , currently only offers a 2G femtocell aimed at improving call coverage in the home. The operator hasn't yet announced 3G femto plans other than to acknowledge that it will upgrade when the time comes.

The Avian Securities note suggests that in 2009 the deal will contribute 10 percent to Airvana's revenue, which is at the lower end of the vendor's guidance. Nonetheless, investors are very positive about the deal, which represents the first significant 3G femtocell contract in the U.S.: Airvana's stock is up 2.81 percent, or $0.17, at $6.21 in morning trading on the Nasdaq.

Airvana's SEC filing states that the deal is non-exclusive, so it seems likely Sprint will sign up other femto suppliers.

— Dan Jones, Site Editor, Unstrung

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