Real-time, wireless communication tech company Etherstack (ASX: ESK) has signed an agreement with telco company Telstra for the trial and evaluation of Etherstack’s innovative Mission Critical (MCX) 3GPP standards compliant Interworking Function (MCX IWF). Basically, it’s a technology that ensures communications work seamlessly and reliably with different systems during emergencies and for public safety.
This technology connects digital radio networks, like the ones used by government public safety agencies, with upcoming ‘Mission Critical Push-To-Talk’ (MCPTT) cellular services, which are being considered for use in Australia as part of the government’s Public Safety Mobile Broadband (PSMB) initiative.
The creation of a national PSMB was supported in the Australian Government’s May 2023 budget to drive delivery of a national PSMB capability, and follows similar government backed initiatives currently underway in the United States, United Kingdom, New Zealand and multiple other markets across the EU, Middle East and the Americas.
As per this agreement, Etherstack will deploy the MCX IWF technology to Telstra as it is currently supplying to the AT&T FirstNet project (via its global teaming partner Samsung) which is the largest deployment of this emerging technology in the world.
Etherstack’s Chief Executive Officer, David Deacon, said, “We are thrilled to have the opportunity to trial our MCX IWF with Telstra at home in Australia. Our technology is being well received in multiple markets globally and it is great to have our technology being used in support of local public safety applications.
“Etherstack has been at the forefront of standards-based public safety communications innovation for over 20 years. It is fantastic to see adoption of our world-class MCX IWF technology in multiple carriers across the globe”.
Etherstack develops wireless tech for public safety missions. Though it has quite a few products in its portfolio, the fate of its revenue remains uncertain. Or at least that’s the reason the Company used to explain its 40% revenue decline in H1 CY23, from $7.5 million in H1 CY22 to $4.5 million. As per Etherstack, the decrease is due to factors out of its control—project delays and such. But it also reflects the inherent nature of Etherstack’s business, which will always have an element of volatility.
Its EBITDA was $844k, down from $3.4 million in the pcp. Its statutory net loss after tax was $2.1 million, a decrease from a profit of $2.5 million in H1 CY22.
At the end of 2023, the Company expects its revenue to be between $14.15 million and $15.7 million, as it onboards new clients, furthers contracts with existing ones, and wraps up projects.
Moreover, the MCX IWF looks poised to be a major contributor. The telco element got its first order from Samsung and has now locked in Telstra. This contract is pretty big news for Etherstack which relies on a small number of large contracts. Having such major clients would provide some financial relief.
The trial will initially last approximately nine months. Although the trial contract’s financial value is not substantial, it will demonstrate the tech’s widespread demand across multiple markets through collaboration with another major telecommunications company. This trial is expected to generate approximately $320,000 in revenue for Etherstack in 2023.
Alinda is a Business Reporter for The Sentiment
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