Translation: Original comment published in Finnish on 9/28/2023 at 7:27 am EEST.

Tecnotree announced that it has signed a new digital transformation agreement with Telikom Limited from Papua New Guinea. The press release did not mention the value of the order, but we do not consider it to be particularly large as it was a press release. The order now received does not cause estimate revisions but contributes to the growth outlook we project for Tecnotree in the coming years.

Telikom Limited is one of the leading telecommunications companies in the South Pacific, providing fixed and mobile services in Papua New Guinea. With the signed agreement, Tecnotree will provide Telikom with its BSS Edge platform, which will enable Telikom to better manage the lifecycle of its customers and integrate its different businesses. Overall, Tecnotree's BSS Edge gives Telikom the tools to improve its customer experience and enhance its monetization capabilities.

The exact structure of the order was not disclosed in the press release. For license-based orders, typically about half of the order consists of a license (payable immediately) and half of a deployment (payable typically within 12 months). However, Tecnotree has increasingly focused its sales on an ARR model, where revenue is generated gradually over a longer period of time. Regardless of the delivery model, the repatriation of new orders in Q3 (other comments here and here) is obviously positive for the company, as we consider the risks to the demand outlook to be somewhat elevated. One sign of this was the slowdown in order flow during H1 and a slight year-on-year decline in the order book at the end of Q2'23 (Q2'23: EUR 68.4, -6%). However, the shift to the ARR model may partly explain the slowdown in the order flow, as there are fewer larger individual orders to be filled at once.