http://www.proactiveinvestors.co.uk/companies/news/12781/telit-communications-in-strategic-cooperation-with-deutsche-telekom-and-t-mobile-12781.html

Telit Communications PLC (AIM: TCM) said it has entered a strategic collaboration agreement with German fixed telephony provider Deutsche Telekom AG and its mobile telephony unit T-Mobile GmbH which will see the three groups work together globally in the machine-to-machine (M2M) communication sector.

The partners in the venture will be working closely together on sales and marketing in their target markets and plan to jointly develop innovative M2M products and services in the future.

Deutsche Telekom, T-Mobile and Telit will be pooling their expertise based on the terms of a memorandum of understanding. The agreement covers the areas of product development - including the simplification and standardisation of products - sales and marketing.

In particular, the companies plan to identify relevant target markets in the telematics, fleet management, navigation, remote metering, vending machine and security segments. T-Mobile and Telit will be looking to work closely together in developing and marketing innovative M2M solutions.

In December, Astaire Securities offered an upbeat forecast for the prospects of Telit Communications, projecting the M2M module market to return to 20% per annum growth, while estimating the reduction in cost of profits following Telit’s relocation of manufacturing to China at as much as 20%.

Following years of 15-20% growth in revenue and 25-30% in shipments in the M2M market, 2008 saw an overall contraction as a number of projects were postponed or cancelled due to the unfavourable conditions in core market, including transport. Revenues fell 12% to US$868 million, while the ASP (average selling price) tumbled 10%.

Still, Telit managed to grow revenues and unit shipments in 2008, being able to continue this into 2009. Moving production to China will likely help Telit, already the world’s third largest supplier of M2M modules, gain a bigger market share, the broker had added.http://www.proactiveinvestors.co.uk/companies/news/12781/telit-communications-in-strategic-cooperation-with-deutsche-telekom-and-t-mobile-12781.html