CyanConnode Has Contract Extended
CyanConnode, the world leader in narrowband radio mesh networks, announces that the $5.4 million purchase order from a specialist in energy management systems for a smart metering contract in Bangladesh, South Asia, announced on 9 February 2017 has now been increased to $9.3 million.
The order for CyanConnode’s Advanced Metering Infrastructure (“AMI”) solution has been increased from 150,000 units to 250,000 units to meet the increased requirements of the geographic territory in Bangladesh that has been awarded to the energy management systems company based in Eastern Europe. The energy management system company, which manufactures circa. 1.5 million utility meters per year, will integrate CyanConnode’s hardware with its meters and shipment to their production facility will take place over the next 12-18 months.
CyanConnode will also provide Head End Server Software, which will be hosted by the energy management system company, with annual software licence income being recognised over a ten-year contractual period following successful smart meter implementation. The recurring revenue software licences and annual maintenance contract, which represents approximately 50% of the revised purchase order value, will be paid annually and charged on a per meter per year basis.
This increased order from the Ukrainian company for utility customers in Bangladesh demonstrates the success of the company’s scalable business model. Furthermore, the order size and revenue visibility provided by this 10-year contract reflects the Company’s leading position within the smart metering industry across both emerging markets and Europe.
The energy management system company has formed a local entity, a new utility that has entered a long-term agreement with the Bangladeshi Government to provide electricity to consumers. The new utility has a consumer base of four million customers, which provides the potential for further substantive orders. The overall number of electricity consumers in Bangladesh is ~58 million. Bangladesh is among four South Asian countries that are struggling due to increasing pressure from rising electricity demand, failure to collect revenue and poor reliability, according to smart grid research specialists Northeast Group. Over the next decade, these countries will make significant investments to modernise smart grid infrastructure, particularly in the metering segment. Smart grid investment is projected to total $8.1 billion over the period 2016-2026, with large-scale funding from the Asian Development Bank, the World Bank as well as bilateral aid organisations.
John Cronin, CyanConnode Executive Chairman, commented: “We are pleased to announce a significant increase to the recent order from our partner for their deployment in Bangladesh. CyanConnode provides world class support to its partners, enabling them to integrate and deploy its narrowband mesh network technology. Through the transfer of skills this collaborative approach facilitates customer ownership and develops customer loyalty, which is demonstrated by this substantial order.”