Senetas encryption technology selected in US$10 million order

Stan Beer
Friday, 29 October 2004 19:50

IT Industry - Development

ICT security vendor, Senetas Corporation Ltd (ASX:SEN), has had its SONET/SDH data encryptor technology selected by the US Department of Defence to secure US military installations world wide in an order said to be greater than US$10 million.

Senetas technology partner SafeNet Inc announced overnight that "SafeNet has received a substantial government order for SafeEnterprise SONET Encryptors and SafeEnterprise Security Management Center software. Under the contract, SafeNet will deliver SafeEnterprise SONET Encryptors operating at networking speeds from 155 Mbps to 10 Gbps."

Senetas has a technology and licencing agreement with SafeNet whereby SafeNet acquired the exclusive (other than for Australia and New Zealand) worldwide marketing and production rights to CTAM's encryption appliances, which protect communications over ATM and SONET telecommunication networks.

Under the agreement Senetas is entitled to receive fees of up to 30% of the revenue generated by SafeNet from sales of its ATM and SONET encryptors. SafeNet advised overnight in its quarterly results that the order from the US Department of defence was in excess of US$10 million and would be delivered over Q4. The order is to secure US military installations around the world. It represented approximately 20 % to 30% of the overall network security requirement of the US Department of Defence. SafeNet expected to receive the additional orders over a number of quarters. It was unable to specify more precisely when they would be received.

Senetas CEO Mr Francis Galbally said, "Whilst we expect this order and the follow on orders anticipated by SafeNet will necessitate the company providing further guidance for its profit forecast for financial year 2005 it is too early to reforecast at the present time without a clearer understanding of the product delivery timetable that SafeNet will work to and any additional orders it can anticipate for the SONET encryptors over this quarter and the first half of 2005. However I can say that this order does underpin the sustainability of revenues we expect to receive from our CTAM technology over the next few years from our worldwide partner SafeNet."

SEN shares closed up nearly 10% to finish on 17c in high volume trading.