Elephant Talk Announces Mobile Operation Contract for Latin American Market, Offers Guidance
With plans to enter the U.S. market through the recently announced acquisition of 100% of the assets of Telnicity, LLC, a U.S. MVNE/MVNO enabler company headquartered in Oklahoma City, Oklahoma and the award of a contract to provide out-of-band and transaction verification solutions in November 2012 with a leading U.S. financial institution, Elephant Talk Communications, Corp. (NYSE: ETAK) (www.elephanttalk.com), an international provider of software and services developed to manage network, billing and systems infrastructure for the telecommunication industry and a market leader in providing solutions to counter electronic fraud for the financial services industry, today announced it has signed a contract to implement the Company's proprietary Software Defined Network ("SDN") platform for an established mobile operator in a major Latin America market. Elephant Talk is also releasing preliminary results for fourth quarter 2012 and the year 2012.
The mobile outsourcing platform will have a capacity for 10 million SIMs. The Company expects the initial migration of approximately one million existing Latin American mobile subscribers to Elephant Talk's proprietary SDN platform to begin in mid-2013. The migration is expected to take several months. Subscribers on Elephant Talk's SDN platform will generate recurring revenue on a per subscriber per month basis.
Software Defined Networks are the most efficient way to handle the increasing demands from mobile operators, from small mobile operators to networks carrying tens of millions of SIMs. Elephant Talk, a leader in the development of SDNs, expects an increasing number of mobile networks to convert to these platforms over the next few years.
In addition to announcing the Latin American contract, Elephant Talk released preliminary 4Q12 and 2012 results.
Preliminary 4Q12 results:
o Mobile and Security revenue was approximately $3.4 million, a year-over-year increase of about 76.7% o Mobile and Security revenue accounted for an estimated 51% of total revenue in the fourth quarter, up from 44% and 23% of total revenue in 3Q12 and 4Q11, respectively o Gross Margin (revenue minus cost of services), a non-GAAP measure, increased approximately 69% to about $2.5 million for the fourth quarter representing about 37% of total revenue. Gross Margin for 4Q11 was $1.5 million, accounting for 18% of total revenue
Preliminary 2012 results:
o Mobile and Security revenue for 2012 almost doubled to approximately $11.5 million from $5.8 million in 2011 o Gross Margin (revenue minus cost of services), a non-GAAP measure, increased approximately 132% to about $8.2 million and represented around 28% of total revenue. Gross Margin for 2011 was $3.5 million accounting for 11% of total revenue
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