TMCnet News
Bridgewater Systems authenticates cellphone users when they hop on networks(Canadian Press DataFile Via Acquire Media NewsEdge) MONTREAL _ The popularity of video, Twitter and Facebook on cellphones and the need for faster wireless networks is giving Bridgewater Systems (TSX:BWC) growth opportunities and making it a potential takeover target. When consumers use their cellphones, Bridgewater has the software that authenticates users to see if they're allowed access to their networks to use services they've paid for in their monthly plans. When they share their location with Facebook friends or send text messages, all the data traffic needs to be managed behind the scenes. ``The area that really is in a hyper growth state is mobile data,'' said David Sharpley, Bridgewater's senior vice-president. Smartphones that allow users to watch videos and run more powerful software applications are helping push this demand for data and a PC-like experience while on the go. ``They're becoming mobile data Internet devices,'' Sharpley said of smartphones. More than 140 service providers including Bell (TSX:BCE), Latin America's America Movil, Clearwire, Cox, Telecom New Zealand, Sprint and Verizon Wireless use Bridgewater's systems. Bridgewater sees its primary competitors as Swedish telecom giant Ericsson, telecom equipment supplier Nokia Siemens and Chinese telecom Huawei. Sharpley believes Bridgewater has an edge because it doesn't also build handsets, radio network infrastructure or other equipment like its competitors. ``We enable our customers to personalize their mobile experience for their subscribers,'' he said in an interview from Ottawa. ``This is the only thing we do.'' Some analysts have looked favourably on Bridgewater and have given its stock target of $13 and also view it as a potential takeover target by larger players. ``We view BWC as an attractive takeout candidate, with possible acquirers including Nokia, Ericsson, Cisco, Amdocs, HP, IBM, others,'' RBC Capital Markets analyst Mike Abramsky wrote in a recent note. ``Precedent transactions suggest possible takeout valuations at $15-$17 a share, (15-30 per cent upside to our target).'' Bridgewater shares closed down 37 cents at $7.98 on the Toronto Stock Exchange on Thursday, giving it a stock market value of just under $200 million. National Bank Financial analyst Kris Thompson also sees Bridgewater as an acquisition target. ``Bridgewater's revenues are levered to the wireless service providers' needs to upgrade their networks to satisfy growing demand for data services,'' Thompson wrote in a research note. He said Bridgewater is well positioned with ``marquee customers'' in older technology networks and has new solutions and global partners that should help it ``better penetrate'' the larger advanced network space. In Canada, Sharpley said cellphone customers using mobile data services at Bell are ``managed and authenticated'' by Bridgewater. Bridgewater also caters to the iPhone and Research In Motion's BlackBerry with a system that carriers can offer to customers to let smartphone users to manage their data use and stay on budget. ``Everyone has got a story of the bill shock scenario,'' he said. While mobile advertising still growing, Bridgewater also has products that would help carriers personalize ads on the devices. ``We know who you are and what device you are on and so forth,'' he said, adding consumers would have to agree to receive personalized ads. ``I think the industry is still in debate on the whole notion of privacy and what information can be exposed.'' Earlier this month, Bridgewater increased its 2009 revenue guidance to a range of $62 million to $64 million, up from its previous guidance of $58 million to $62 million. The 220-employee company reported earned $2.8 million or 11 cents per share on $44.2 million in revenue in 2008. (c) 2009 The Canadian Press |