DragonWave, a high-capacity microwave provider, saw its net income plunge 93 per cent in fiscal 2011 to $2 million amid efforts to diversify its customer base.
The profit reduction was in large part due to chief customer Clearwire's decision to slow its network build and slash 15 per cent of its workforce of 4,200 employees amid large losses late in 2010.
In a statement, Clearwire noted it would remain the primary point of contact with its existing customers, partners and equipment vendors. Around 700 employees are expected to transfer over to Ericsson as part of the deal.
The pact is similar to one that Sprint, Clearwire's majority owner, signed with Ericsson in 2009, noted John Lawlor, DragonWave's vice-president of investor relations.
"It brings Clearwire still closer to alignment with Sprint and improves the likelihood for Clearwire and Sprint to share network infrastructure moving forward, which would be ... positive for DragonWave, given our strong relationship with both operators," Mr. Lawlor said in an e-mail to OBJ.
DragonWave's stock, which fell by about two dollars in the past month, was up 26 cents late Wednesday, trading at $6.50 on the TSX.
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