Performance

Revenue in the EMEA region amounted to NOK 813 million, corresponding to 45 percent of total revenue for Nera Networks.

Scandinavia

Nera Networks confirmed its position as a leading player in the Scandinavian region, serving both the rapidly growing private enterprises and local networks markets with Point-to-Point and WiMax solutions; as well as the fixed line carriers and defense networks markets. Offshore solutions constituted a particular growth area in 2008. In the defence sector, growth was not that pronounced when it came to backbone network investments.

Western Europe

Nera Networks operates through local offices in Milan and London, as well as through well-established distributors in Portugal, Spain and Germany. The UK market is mature and growth was modest in 2008. Nera Networks performed well and consolidated its position in the internet broadband segment, where the Evolution series is ideal with its low entry cost and software scalability.

Nera Networks Italy continued to perform well in 2008, and recorded a healthy growth. The company’s position as the leader in the broadcasting segment was confirmed. Going forward, Nera Networks will build on this position and leverage the strength of the Evolution Series also in other segments like Governmental and Defence.
A contract was also won in Spain, opening up new opportunities in this large market.

Central Europe

Nera Network’s revenues in the Central Europe region increased in 2008. The region is served from Nera Network’s main office in Norway, as well as from hub offices in Sofia, Bulgaria and Serbia, which support activities in Poland, the Czech Republic and Kirgizstan.  In January 2008, the company was awarded a EUR 6 million contract in Bulgaria, for delivery of secured national communication network to the Ministry of Interior. Deliveries took place in 2008 and the network will allow for voice, real-time video and high-speed data between the Ministry of Interior and the South-east Schengen border and the harbors of Bulgaria.  The solution is key to the protection of the Bulgarian and the external Schengen borders of the European Union.  Another important win was a backbone contract in Montenegro.

While the financial crisis makes market development hard to predict, growth is still probable in the region. For example, there is still a high level of investments and privatizations in the region and Internet penetration is still underdeveloped. The expansion of EU and NATO may trigger new communications projects.

Eastern Europe

In Russia, business developed well and revenues increased significantly. The company consolidated its position in the corporate sector, and at the same time built positions in the mobile and alternative operators sector.  However, market conditions deteriorated significantly towards the end of the year, making the outlook for 2009 uncertain.

Africa

Nera Networks can look back on a long history in Africa where it has delivered a number of successful, large turn-key projects. Due to the size of the continent, the company focuses on relatively few markets and projects, but is well represented in key markets. The company’s performance in 2008 was good, with revenue growth in the region of 15 %, and with volume deliveries of the Evolution series products.

West Africa is a strong market for Nera Networks. The region is served from the office in Nigeria. Nera Networks enjoys good business relationships with several large operators. Among achievements in 2008 was a turn key contract with a broadcasting company for the establishment of a broadcasting network. The contract value was NOK 150 million, and included in addition to Evolution transmission equipment also TV/FM transmitters, studio equipment, towers and masts and services. The contract confirms the company’s position in West Africa and it shows that the product range makes it possible to to compete and win market shares in different segments of the radio market. In March, the company signed a EUR 18 million contract with the government of Equatorial Guinea. This turn-key solution involves the longest radio hop in Nera's history. The 243 km hop from the Bioko Island to the mainland is also among the longest radio hops in the world.

North Africa is also a strong market, where Nera Networks continued to serve key customers in Algeria, Libya and Morocco.

South Africa is the largest market in the Southern Africa Region. Nera Networks has business with one of the major operators, and ongoing business in neighboring countries.

Mobile penetration is low and Africa is therefore a growth market with substantial potential and the drive for increasing bandwidth is evident also here. In addition to the mobile segment, growth is expected also in the FWA (fixed wireless access) and broadcasting. Nera Networks is well positioned with its product range, qualified organization and a balanced customer base with a mix of large operators and government organizations. However, the current financial turmoil makes it hard to predict the market development in the time ahead.

Middle East

In the Middle East, the level of business was stable and several contracts were won with some of the large operators in the region. The main markets in 2008 were Saudi Arabia, Oman and the UAE. The organization was strengthened and a new office in Saudi Arabia established. In Pakistan, business was slower than targeted, but the company is involved in projects that hold potential  for the year ahead.



Revenue in the Americas amounted to NOK 744 million, or 41 percent of total revenue for Nera Networks. This is an increase from NOK 467 million in the previous year.

In Brazil, Nera Networks had a successful year. We maintained our relationships with key customers and added a large national operator on the list of customers. Both revenue and order entry more than doubled in 2008. Contracts won included one with a Brazilian mining and energy company for delivery of Evolution Series Long Haul equipment. The contract was worth NOK 18 million and involves equipment for the customer's backbone network, and included around 50 SDH high power radio transceivers, antennas, management system and professional services. Nera Network’s main focus is on mobile networks, as well as on radio-based back-bone networks that provide network connection for rural areas without a fiber infrastructure. In the time ahead, strong competition for mobile market shares among operators will prevail and the build-out of 3G networks will most likely continue. On the other hand, the current financial turmoil may hold investments back. The offshore sector in Brazil represents an opportunity for Nera Networks going forward.

Business levels in Argentina, from where Nera Networks also manages its business in Uruguay, Chile and Paraguay, saw a marked increase in 2008 with a doubling of order entry and revenue. In this region, too, the basis for continued growth exists. The market is now in demand of flexible transmission solutions,as transmission is now a main bottleneck in 3G deployment. Nera is well positioned with a well-suited product line a broad services offering. However, the financial crisis makes market projections uncertain.

In Venezuela, revenue nearly doubled, to a large extent due to a growth in the sales of services and project extensions.  While mobile operators will likely continue to build 3G networks, the financial crisis – and in particular the marked decrease in the oil price – will hold back investments in both the private and public sector.

In Colombia, from where also business in Honduras, Guatemala and El Salvador is managed, there was a modest growth in revenue. Among achievements was the first Evolution Long Haul project in the region, in Honduras. Another achievement was the order from Colombian fixed operator ETB of USD 2.3 million, involving delivery of InterLink microwave radios and installation services. A well-functioning collaboration with Eltek Valere resulted in sales of power systems including cabinets, rectifiers and batteries. Going forward under challenging market conditions, Nera Networks will continue to leverage the combined strength of products and services offerings.

In Mexico, the shift in demand from high-capacity radios to significantly cheaper low and medium capacity radios prevented growth in revenues, despite an increase in the number of radios sold and doors opened with new customers.  A somewhat lower activity level with main customers was compensated by government projects through system integrators. Services remain an important part of total revenues. The general market outlook for the near future is negative, however, the Evolution product range makes Nera Networks well positioned to exploit opportunities in the low-capacity segment.

In the large US market, Nera Networks is a fairly small player. The financial crisis has had a marked slowdown effect on investments by the main mobile operators, however, the stimulus plan earmarks several billions of dollars for projects that will use wireless microwave technology. Overall in the coming five years one could expect to see a much increased use of microwave radio compared to copper and fiber, but 2009 will likely be a very difficult year. Nera Networks aims at consolidating its position as the main microwave provider to key customers and increasing sales through distribution via resellers and integrators.

In the Caribbean, Nera Networks continues to hold a key spot in supplying microwave solutions to a major customer, and aims at expanding to new customers