COVID-19 and distributed architecture hesitation hit Teleste

Broadband technology provider Teleste saw its sales drop significantly in the second quarter as operators stopped working on networks upgrades and projects due to COVID-19 restrictions.

Group net sales dropped by 20.7% to €33.5 million for the quarter, and the company posted a loss of €2 million compared with a profit for €1.4 million for the prior year period.

Video and broadband orders received in the second quarter amounted to €25 million, a decrease of 30.8%. Teleste said that the fall in orders reflected both the ability of customer to work during the pandemic and by operator’s expectations regarding the transition to distributed access architecture technology.

Teleste CEO Jukka Rinnevaara said that “new distributed access architecture products are currently being tested together with customers in Europe and the USA, but the COVID-19 pandemic is slowing down the testing process”.

While Teleste’s video and broadband order backlog increased by 3.7%, net sales in this segment decreased by 19.4%.

Rinnevaara said that “operators restricted or suspended their broadband network construction” during the quarter, and the group experienced “ a substantial year-on-year decline in the orders received, net sales and operating result”.

Rinnevaara said that the gradual lifting of restrictions had led to an improvement in June but that the situation “remains difficult in certain markets, such as the USA”.

“The overall impact of the pandemic on Teleste’s business is still extremely difficult to estimate due to the uncertainty related to the development of the pandemic and its potential second wave,” he said.