Ituran Location and Control Ltd. (Nasdaq:ITRN); TASE:ITRN) is strengthening its foothold in the Far East. The company, controlled by the Sheratzky family, today announced that its subsidiary, Telematics Wireless Ltd. received an order from Korea Location Information and Communication Ltd. (KLIC) to $14.6 million worth of infrastructure equipment.
Ituran said that the new order for the Telematics' Terrestrial Location system was "an expedited turn on of the second and third phases of the agreement" between Telematics and KLIC. The first phase of the agreement for the deployment in Seoul was initiated in July 2005. Ituran believes that the project will be completed by the end of 2007, with 15% of it to be completed by the end of this year. In the first stage of the project, KLIC place an order for $5.4 million worth of equipment to provide location-based services for people, cargo and cars in the South Korean capital of Seoul. This stage of the project is now drawing to a close.
KLIC decided to move on to later stages of the project, for which Ituran will supply equipment for KLIC’s services throughout South Korea. This is a positive step for Ituran, since the original contract was not binding after the first stage of the project, and there was no certainty that it would execute the project’s later stages, or that Ituran would receive a follow-on order.
Ituran expects a further upside in wake of the present order. In addition to building infrastructures for its customers, the company expects to supply end-user equipment for the implementation of its technology. This is proprietary equipment, which makes the buyer dependent on Ituran, thereby guaranteeing additional revenue from customers after the infrastructure is laid down.
Published by Globes [online], Israel business news - www.globes.co.il - on September 6, 2006
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