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KVHI: Huge contract

September 30, 2010 Leave a comment Go to comments

KVH Industries today announced a 10-year contract with the US Coast Guard. The contract is the biggest in the company’s future, valued at $42M.

The winner of a full and open competitive procurement process, KVH’s TracPhone(R) V7 satellite communication system and the mini-VSAT Broadbandsm service becomes the U.S. Coast Guard’s Small Cutter Connectivity (SCC) Ku Band System and Air Time Support Services solution. The U.S. Coast Guard Telecommunications and Information Systems Command (TISCOM) will deploy it over a 3- to 5-year period aboard as many as 216 small cutters representing 16 different cutter classes. The contract, encompassing the shipboard hardware, airtime services, and support, is a 10-year Indefinite Delivery/Indefinite Quantity (IDIQ) Contract valued at approximately $42 million.

The contract is for installing as many as 216 TracPhone v7 systems. This is huge for the company in terms of recurring cash flow, signing up other companies, and future deployment of additional systems with the US Coast Guard.

This is just a beginning of what I expect to be just the beginning of major sales cycle for the company. With the company close to covering the entire globe, major upgrade in the connection speed, and the stamp of the US Coast Guard, the company’s sales pitch should get easier and stronger. I expect big sales growth for the company in next year.

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