Project Angel Revenue Called Into Question

Communications Today, May 30, 2002

A major shareholder of Netro [NTRO] has gone public with a contention that the firm's Project Angel fixed wireless broadband offering, acquired from AT&T [T], will see no revenue this year. Netro shareholder Robert C. Coates issued his own media statement in which he repeated a statement reportedly made by CEO Gideon Ben-Efraim during an annual shareholders meeting on May 21. Coates supposedly said Project Angel would not hit the market until late this year and would generate no revenue for the company in 2002.

That differs from earlier statements in which Netro projected the technology would hit the market in the third quarter and represent 15 percent of the company's revenues by the end of the year. In his statement, Coates claims that the company has not made these revised expectations public, and that this violates the Security and Exchange Commission's Fair Disclosure regulations.

The public allegations appear to be part of a power struggle over control of the company. Coates holds 2.4 million shares of Netro and claims the company "needs better corporate governance" to drive its stock price up. Coates is a candidate for Netro's board in a shareholder election, for which votes are still being tallied.