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Megisto Maxes Up

Light Reading
LR Mobile News Analysis
Light Reading
2/24/2004

CANNES, France -- 3GSM Congress -- Megisto Systems Inc. has broken its silence on the identity of its first commercial carrier deal since refocusing efforts away from the wireless router market.

The vendor today used the Sunny South of France as the backdrop for its deal with Maxis Communications, announcing that Malaysia’s second largest carrier by subscriber base (3.5 million) has deployed its Mobile Services Delivery System (MSDS) platform (see Megisto Scores in Malaysia).

The financially undisclosed contract marks a welcome return to revenue for the four-year-old company, following a major shift in market focus.

Earlier this month Megisto told Unstrung it is now focused on providing infrastructure for “value-added services, specifically in prepaid, content charging, and service packaging,” rather than attempting to tackle incumbent vendors in the GGSN (GPRS Gateway Support Node) and PDSN (Packet Data Serving Node) markets (see Megisto Breaks Silence).

According to president and CEO Gordon Saussy, the Maxis deal was won last summer following “an open tender involving 11 different vendors.” Commercial services running over the MSDS platform were activated on January 1st this year.

“We now have unequivocal proof that our product works,” beams a relieved [ed. note: and surprised?] Saussy. “It validates our new strategy. It is a real commercial deal -- we didn’t buy the business.”

The win will ease pressure on the startup in light of rumblings over its financial health (see Megisto Denies Brain Drain). In theory, at least, the market for data content services seems to be a safer bet for the vendor, following recent rival successes and increased carrier expenditures (see P-Cube Strikes Double Deal).

“I am encouraged to see the level of activity happening in this market,” smilingly says satisfied Saussy. “There are real deals happening in this space. We also have another win and are in the deployment phase. It would be nice to announce this in the next quarter, but we will have to wait and see.”

Looking ahead, the Prez backtracks slightly on previous company policy not to comment on financial goals. “I don’t expect to be cash-flow breakeven this year, but next year is a target.”

— Justin Springham, Senior Editor, Europe, Unstrung

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