M2M module maker Telit expects revenues for the first half of the year to grow to $108.1 million, up from $98.6 million in the first half of 2012.
In a trading update released in advance of its full earnings report, the company says that revenue performance is likely to exceed market expectations of $107.5 million for the first six months of 2013.
The manufacturer is also forecasting a substantial decrease in net debt to just $8.6 million, from $12.7 million at the end of 2012.
The update also contains the first details of the financial performance of m2mAIR, the value-added services offering that Telit (London, UK) launched in July 2012.
According to Telit, m2mAIR generated $2.4 million in revenue over the first six months of 2013 and now has around 600 customers.
Telit is also conducting m2mAIR pilots with more than 570 potential customers worldwide.
The figures represent substantial progress since December 2012, when Dan Amir, the head of m2mAIR, told M2M Zone that the number of customers was approaching 100, with some 300 companies piloting the service.
m2mAIR is intended to provide a recurring source of income on top of module sales, although it puts Telit in competition with mobile network operators and other organizations looking to play a bigger role in the M2M value chain.
Like other companies setting themselves up as mobile virtual network operators (MVNOs), Telit has been fairly dismissive of operators’ ability to compete for certain types of M2M customer, touting its distribution channels and understanding of M2M applications as core strengths.
Nevertheless, there is clearly still a long way to go if m2mAIR is to satisfy expectations.
At $2.4 million, revenues from m2mAIR form just 2% of Telit’s overall sales for the first six months of 2013.
Amir reckons m2mAIR could ultimately increase revenue per unit by a factor of between five and ten, and believes the prospects are bright if Telit can bundle the service with just 20% of its modules.
Telit’s financial update also indicated that trading for the full year 2013 will be in line with market expectations.