NetComm back on the broadband bandwagon

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After a disastrous attempt to become a broadband access player last year, Aussie comms gear maker NetComm is chasing broadband riches again.

NetComm believes broadband revenue will rise to become 60 percent of the company's revenue within 12 months as it peppers the market with 40 new products over the next four months.

The product blitz will see NetComm release new wireless, ADSL, networking, routers and modem equipment.

In 2001, NetComm blew $3 million in seed capital on a DSL carrier project that would have seen the company straddling DSL network access and equipment sales. At the time, NetComm managing director David Stewart blamed bad timing on the misadventure and said the high cost of access to the ULL (unbundled local loop) put forward by Telstra had “dampened the enthusiasm for DSL services” in Australia, making it difficult for all the DSL players.

Since then NetComm has been in belt tightening mode. In 2002, the company spun the slimmest of profits, chalking up $281,989 after-tax on revenue of $17.25 million. This compared to revenue of $20.27 million and an after-tax loss of $6.62 million in 2001.

While NetComm's first DSL foray ended in woe, this time the company may find a little joy. The DSL market has been booming in the second half of 2002, with DSL modem suppliers reporting soaring volumes in the past three months.

D-Link said its DSL modem shipments had grown by 5,000 units to reach 13,000 units in September and it expects a further jump to 16,000 or 17,000 units per month by the end of the year.

In an interview earlier in October with iTnews, Stewart said DSL modem sales had quadrupled since June, although he conceded this was is off a fairly low base.

NetComm said its broadband router sales increased by 54 percent in September. NetComm shares have traded around the 8 cent mark in recent weeks.

Disclosure: Stuart Kennedy owns shares in NetComm that he bought in 1995 for well over $1 a pop and has kept as a lesson in the vagaries of the tech stock market.

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