Ava Risk Group breaks into telecommunications vertical with landmark Telstra partnership

Global risk management specialist Ava Risk Group (ASX: AVA) has achieved a major breakthrough, signing a new contract with Australian communications leader Telstra (ASX: TLS) for an initial 2 year supply agreement.

The confirmation of the Telstra supply agreement (TSA) follows 10 months of close collaboration including product trials with Telstra and its customers.

It comes on the back of Ava’s record quarter sales intake and a strong earnings performance for the first half.

Chief executive officer Mal Maginnis said the TSA has established a substantial opportunity for Ava within the large and globally addressable telecommunications vertical and shows the adaptability of the company’s technology to adjacent applications such as telecommunications, opening up significant new markets to the company.

“Signing a preferred supplier agreement with Telstra is a very significant milestone for Ava Risk Group. It underscores the strength of our market-leading solutions and is testament to our commitment to innovation to meet the evolving needs of our global client base.”

Pre-deal trials

In the lead-up to the signing of the TSA, Ava successfully completed a number of trials with Telstra including monitoring of its urban fibre network in metropolitan Melbourne and the subsea fibre cables in the Port of Darwin.

Mr Maginnis said the trials highlighted the superior ability of Ava’s sensing technology and its synergy with Telstra’s existing fibre network to detect events and provide appropriate classification and reporting.

“It clearly demonstrates that our sensing technology, which has evolved from security solutions, can be deployed to multiple applications. This collaboration cements our position as a trusted supplier and we look forward to working extensively with Telstra.”

“With more than 5 billion kilometres of fibre optic cable deployed globally (as at 2022), the agreement with Telstra Group represents the entry into a large and attractive market vertical for Ava Risk Group’s technology,” he added.

Ava’s fibre sensing technology will now provide continual monitoring and asset protection for the Telstra network, helping to protect it against potential fibre cable strikes.

An initial area of commercial focus will be on the fibre optic assets of Telstra InfraCo, which is responsible for 250,000km of fibre optic cable, 8,200 mobile towers, 10,000 exchanges, two data centres and access to 400,000km of subsea cable.

Strong first half

In late January, Ava reported record Q2 sales order intake of $12 million, resulting in H1 sales order intake of $19.7m, an increase of 37% on the prior year.

The period also saw strong growth in new verticals across North America.

The Q2 performance helped Ava achieve a sales order backlog of $8.9m, with the company confident the majority of the backlog will be converted to revenue through calendar year 2024.

“Our record sales performance in Q2 gives us great confidence in the outlook for FY2024 and beyond,” Mr. Maginnis said.

“We are particularly pleased to have secured significant orders during Q2 on major infrastructure projects in Australia and Latin America, demonstrating the versatility of our market-leading fibre sensing technology.”