Redknee’s deal with Vodafone continues its momentum, says Cantor’s Kew

Cantor Fitzgerald Canada analyst Justin Kew believes that Vodafone implementation of Redknee’s virtualized Unified product will serve as an excellent reference for prospecting other tier-one clients.

Redknee’s (TSX:RKN) most recent contract win is a continuation of its recent momemtum, and has the potential to act as a reference deal for future tier 1 propects, says Cantor Fitzgerald Canada analyst Justin Kew.

This morning, Redknee announced a contract win with Vodafone, who will implement the Mississauga-based company’s Unified product into its private cloud environment. CEO Lucas Skoczkowski provided detail on the deal.

“Redknee has a long-standing and trusted relationship with Vodafone and is pleased to support its virtualization strategy,” he said. “Redknee’s flexible and adaptable solution empowers Tier 1 service providers to easily scale to meet the demands of future growth. Through expertise and leadership, Redknee supports innovative service providers using virtualized systems to launch new business models, deliver differentiation and increase their market presence. This demonstrates Redknee’s expertise and capability to provide Tier 1 operators and communications service providers (CSPs) with highly flexible and scalable solutions that integrate seamlessly without disruption to the network, operational processes and the subscriber experience.”

Kew says this contract, which comes on the heels of February’s $6 million contract win with Telekom Austria, a $50-million deal announced in January and two upgrade deals each worth north of $10-million announced last December, is a positive for several reasons. He believes this, the first tier-one customer to implement Redknee’s virtualized Unified product will serve as an excellent reference for prospecting other such clients. The Cantor Fitzgerald analyst thinks this order provides validation of of the growing demand for a virtualized end-to-end offering. And last, he says, this order is a “multi-million dollar win”.

In a research update to clients this morning, Kew maintained his “Buy” rating and $7.75 one-year target on Redknee, implying a 46% return at the time of publication.

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