Sequans Lifted by Early LTE TDD Action

After a tricky first few months as a public company, French wireless chip specialist Sequans Communications has some good news from an emerging market opportunity.

The company joined the public market in April at US$10 per share having built its business developing semiconductors for WiMax devices. But its stock has been in the doldrums since late July, when it unveiled a disappointing third-quarter forecast that sent its share price tumbling from more than $15 to less than $7.

And with all signs pointing towards the slow death of the WiMax market, its share price has withered and dipped below $4.

Now, though, there are real signs that the company is on the verge of new growth based on its development of dual-band (FDD and TDD) LTE chips, particularly for the LTE TDD market. (See GSMA: Dual-Mode a Must for LTE Devices.)

Having already secured two LTE TDD relationships (one in Australia and another as yet unannounced in Latin America), Sequans today announced that Mumbai-based CPE (customer premises equipment) vendor Telenet Systems is using the French firm's LTE baseband and LTE TDD Radio Frequency Integrated Circuit (RFIC) products in its dongle and desktop wireless broadband modems for the Indian market. (See Sequans Selected by NetComm for TD-LTE.)

That's an important relationship because India is set to be the first significant LTE TDD market, with six Broadband Wireless Access (BWA) license-holders set to roll out services in the coming year or so and the market set to grow rapidly in the coming four years. (See page 3 of A Brief Guide to India's Telecom Market for more background plus Ericsson Lands India's First LTE TDD Deal, RIL Prepares Phase II of LTE Trials and Report: 17 Million LTE Users in India by 2016.)

And while Sequans already has a relationship with Taiwanese CPE vendor Gemtek for the India market, Telenet is a local company -- something that counts for a lot in the Indian market. (See Sequans, Gemtek Do LTE TDD CPE for India.)

Investors liked that news, as Sequans saw its share price rise by 3.7 percent to $3.93 in pre-market trading.

Sequans expects to see the first commercial LTE TDD services launch in India in the second quarter of 2012, after which the French firm expects to start reporting revenues as device sales increase.

The wait will be a bit longer for the other main LTE TDD market, China. While there are plenty of trials ongoing and planned, the company doesn't expect LTE TDD services to be available in China until 2014. (See Sequans, Huawei Team for LTE-TDD Trial, China Approves Sequans LTE Chips and NSN, Sequans Make LTE TDD Progress.)

And while Sequans admits that the market for WiMax chips is already starting to shrink, there's a silver lining to that particular cloud for the French chip firm -- many of the world's WiMax players are planning to migrate to LTE TDD. (See Another WiMax Operator Converts to LTE and Going WiMax to LTE Down Under.)

Sequans is not alone in chasing these opportunities, though. Altair Semiconductor , Qualcomm Inc. (Nasdaq: QCOM) and ST-Ericsson are also in the hunt. (See Qualcomm Brings Multi-Mode LTE TDD Devices to India, Altair Chips Gets Certified in Chinese LTE and ST-Ericsson, Nokia Demo TD-LTE Devices .)

— Ray Le Maistre, International Managing Editor, Light Reading

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