MM said I will agree it is a risk, although it is not much of...

MM said I will agree it is a risk, although it is not much of one unless Telstra gets unhappy with Netcomm's products.



I have no idea how to measure and value the level of risk, but in buying NTC you are banking on them not losing the TLS business for the moment and a while to come. I therefore would suggest the risk is very real as an investor. Note, what they sell to Telstra was mostly developed by a Taiwan outfit with only Engineering support input came from NTC. I believe there would be many others who could gear up to supply that business. TLS have shown a preparedness to swap large suppliers quickly in the past (when faced with a commercially compelling reason to), and the NTC business with TLS is very profitable and therefore could be mighty attractive to others.



I think one problem might be that if NTC ask for a formal supply contract it could trigger a very unwanted Tender process, so they just continue as is. However, I think a proper contract is the only clear way to shore-up the current business model.



As for the acquisitions contributions. All of their previous ones contributed for a while too Banksia, Spirit, Dynalink, Netcomm Broadband etc., but they all ended up evaporating as I said before. And what on earth was that Yellow Tail NZ stuff all about!? Look how much was spent there and recently too.



Anyway MM Its always risky to bank on a dominant customer IMO especially without a contract. I respect that you dont think theres much risk there, so lets watch and take this subject up again later. Look they might break the past long-term trend and do ok. I am fairly sure that the coming result will be ok and will stop the declines for a while anyway.



M