Ladies and gentlemen, thank you for standing by, welcome to the Alvarion Q4 '09 earnings release conference call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session; instructions will be given at that time. (Operator Instructions). As a reminder, this conference is being recorded. I would now like to turn the conference over to your host [Karen Shemesh].

Thank you, operator. Good morning, everyone. On the line with me today are Eran Gorev, President and CEO; and Efrat Makov, CFO. The earnings release was issued this morning. It is now available on all major news feeds. Matters discussed in this conference call may contain forward-looking statements within the meaning of the Safe Harbor provision in the Private Securities Litigation Reform Act. These statements are based on the current expectations or beliefs of Alvarion's management and are subject to a number of factors and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements. The following factors, among others, could cause actual results to differ materially from those described in those forward-looking statements; potential impact on our business of the global economic classes; the failure of the market for WiMAX products to develop as anticipated; Alvarion's inability to capture market share in the expected growth of the WiMAX market as anticipated, due to, among other things, competitive reasons or failure to execute in our sales, services, provisioning, marketing or manufacturing objectives; inability to further identify, develop and achieve success for new products, services and technologies; increased competition and its effect on pricing, spending, third-party relationships and revenues; as well as the inability to establish and maintain relationships with advertising, marketing and technology providers; other risks detailed from time to time in the company's 20-F Annual Report risk factors sections, as well as other filings with the Securities and Exchange Commission. For purpose of discussing comparisons to prior period, in this call we will refer to non-GAAP numbers that excludes the impacts of FASB 123R one-time charges such as restructuring cost and the amortization of intangibles. For supplemental information to facilitate evaluation of the impact of non-cash charges and comparisons with historical results please refer to our earnings release as with the detailed reconciliation tables of GAAP to non-GAAP results for Q4, 2009 and the comparative period which also appear on the company's website and attached the press release on major news feeds. I would now like to turn the call over to our President and CEO, Eran Gorev. Please go ahead.

Thank you, good morning everyone. It's a pleasure to join everybody to today for my first earnings call as President and CEO of Alvarion. As you may know, I joined the company in December of 2009 and hasn't yet been two months since I started, and these past seven or eight weeks have certainly been very busy and very, very interesting for me and I'll share some initial observations with all of you after I touch briefly on the quarterly results. Q4, 2009 results were consistent with the expectations and certainly within the range of our guidance. We saw a slight improvement in revenue relative to Q3 of 2009 and we started seeing the effect of a number of cost reduction measures that we took both before Q4 '09 as well as specifically in Q4. These cost reduction measures allowed us to return to non-GAAP operating profitability in the fourth quarter. As you have heard in the past on prior calls with Tzvika Friedman, the outgoing CEO and with Efrat, our CFO achieving operating profitability is an important objective for the company for the management team and we're certainly planning to focus on that going forward as well. Looking at the general market and business conditions, 2009 certainly was a challenging year. The market was impacted by the global credit crisis and telecommunications and wireless broadband in particular were certainly impacted by this as well. Credit is still tight; this is not news to all of you. Operators have been and continue to manage their cash very carefully and number of investment plans that were put together at the end of 2008 going into 2009 will put on hold. And we've seen the impact of that throughout 2009. Efrat in her commentary in a couple of minutes will touch on…

Thank you, Eran. Q4 revenues were within the range of our guidance of $60 million, the sequential increase in revenues combined with the additional impacts of our expense reduction measures in Q4 enabled us to achieve a non-GAAP operating profit. Our extensive effort to streamline the organization and improve efficiency in 2009 resulted in the breakeven level as of year end around $58 million down from $68 million at the beginning of the year. Maintaining profitability will remain an important focus going forward. On the GAAP basis we report a loss of $0.2 per share in Q4. WiMax revenues in Q4 were $43 million up 5% sequentially and down 3% from Q4 2008. Non-WiMAX revenues were very similar to Q3 at $17 million. We plan to discontinue breaking out non-WiMAX revenues beginning in 2010, now that we have introduced WiMAX products for the unlicensed frequencies. This reminds that the bulk of our non-WiMAX revenue will be shifting over to the WiMAX category making the distinction between WiMAX and non-WiMAX far or less meaningful. (Inaudible) metrics for the full year of 2009 are, total revenue of $245 million down 13% from 2008, WiMAX of $179 million, an increase of 5% over 2008, reflecting the contribution of revenues recognized from previous shipments. WiMAX shipments declined 20% to $152 million in 2009, mainly as a result of the global credit crisis and delays in the allocations of spectrum in several countries. Non-WiMAX revenue declined 40% to $66 million reflecting an expected shift towards the WiMAX platform and the ongoing decline in legacy products. Turning to the geographic breakdown of revenue, in Q4, EMEA continue to be the strongest region accounting for 59% of revenue reflecting continuous business from core customers such as [Aero], which was a 10% customer for the quarter. Latin America…

Thanks, Efrat. So in summary, before we take questions I want to reiterate what I said before. The unwelcome delays aside and these things happen with government processes and auctions and funding and such, we clearly don't have a lot of control over the global credit environment. And we're hopefully that we'll see the situation from the credit prospective to improve so that operators, challengers, other organizations will get the funding they need where they are provided by government or in the private sector that would allow them to move forward with their very clear plans to deploy wireless networks whether for enterprise use or for subscriptions, so that we see the positive effect of this on our business performance. I'm enthusiastic; we're enthusiastic as a team about the future of the company and the market, our respective market. We'll make good use of the time that we have right now, the window in terms of a number of these delays that we've touched on to further strengthen the competitive positioning of the company to improve our sales and marketing and delivery capabilities. And as I mentioned before, we are in the midst of building the skill sets and the capabilities to go after very large programs, we've done that in the past this is not something that is brand new, and I want to emphasize that. We are learning from past experiences and continuing to improve in this area as well, so it's a really exciting market, it's fascinating opportunity that lies ahead and we will work really hard with the team to be best positioned to capitalize on the opportunities presented by the market when the situation in regards or in respect of those particular elements that we talked about and in general improve during 2010. We will now be happy to take your questions and just as a comment to the extent we are unable to get everyone or to address every question before the end of call, please by all means do send an email to our investor relations contact and we will be happy to follow up offline. Operator?

(Operator Instructions). Your first question comes from the line of Ittai Kidron from Oppenheimer.

Thanks, Ittai from Oppenheimer. Eran, congratulations and good luck on your role.

Thank you very much.

Efrat, I wanted to dig a little bit into the numbers, first, can you give us little bit more color on that $12 million increase in accounts receivable how spread out is this between customers are concentrated what your graphical exposure is it and how do you backstop this?

Okay, it's spread out quite nicely, I want to say, between regions and customers, there is no certain concentration now. As I said, the main reason for the increase in the balance is more extended payment terms, we find we need to provide as we want to make sure we stayed competitive in the environment of the very stretched credit situation and I added with more limited expense, there were some customers of delayed payments, which is again something we see and is mainly due to the availability of cash for our customers something towards year end if more a trend than any thing.

May be you can correlated this with a book-to-bill, I mean how will that look like and do you feel that is this permanent change in how you do your business, you'll have to going forward keep on providing that long of a credit to customers to be competitive?

Through out the year, it's not something that's happened over the night, it seems to trend and I think I have been discussing it over the last two calls, the trends is out there and it's pleased to hear. Now, I don't see it worsening dramatically, I think it's quite stabilized at the moment, but it is certainly something that I think we'll continue to see until the term ease around the world that's the way I see it.

And book-to-bill, something like that?

I can tell you it's below one.

Below one, is there any color you can provide around that?

No, we usually don't comment on booking as we say, but we haven't indicated ratios before, so I would…

Okay. And lastly before I hand it off, on your guidance range quite wide in the past you've mentioned you always had a one or two kind of big contracts that you didn't know, if we can get milestones on time, and that's why the range was wide is that also the reason this time around, so any thoughts there?

Yes, this is exactly the reason; there are still large components in this guidance that is build bottom up. The certainty we see is, we're having issues with having certainty whether you will fall in or not, that's why I widened the guidance to make sure we land safely in there.

Your next question comes from the line of Mike Walkley from Piper Jaffray.

Just wanted to follow up on a question more on the competitive environment, you gave us a readymade detail about the macro and some delayed plans, but could you discuss how Alvarion is positioning versus the competitors. Are some of the opportunities now getting more second force and could you comment on just overall pricing environment?

I will say we are following in regards to competition. Number one, the fact that there is competition and particularly the interest on the part of the Chinese if anything it confirms to me that it's an interesting market. They would not invest a dime in the market that they didn't' think and I'm saying every one of the competitors out there would not invest a dime in market that they didn't think was attractive. So competition it certainly there, and it's been some of them are more aggressive than others, I think that in the little time I've been with the company, I don't see a thing to be perfectly honest that should prevent Alvarion from winning business, I think that we're well positioned. There are some larger companies than we are in this market, it doesn't necessarily mean that their respective wireless broadband WiMAX business is bigger than ours. In general, I'm confident that with our team members would be experience, with the innovation, the technological leadership and product offering, the services capabilities that we bring to the table. I have no doubt that we can compete effectively for business. In the past my understanding and I want to be very careful, I was not a part of the team back then, but I know Alvarion did not participate in a number of a few large programs. My hope and my desire going forward is to see us compete for large programs. I know we're well positioned to win them. We will certainly not win them all, but if we were in our fair share it will be good news. And so I don't know that I have anything specific to highlight whether it be for Q4 or for Q1 2010 in regards to the completion. I'm just confident in our ability to go after business, big or small in terms of the size of the opportunities and compete effectively and win.

And just a housekeeping question, I think you mentioned that the breakeven went from, was it $68 million entering the year to $58 million but then you indicated some more reductions in OpEx that will flow through Q1. So if $58 million is kind of a good number to think about from a modeling purpose in terms of a pro forma breakeven results or is it even going to be a little lower throughout the year? Congratulations on taken down so much in last year.

Thank you, first, and yes 58 would be the right number from Q1 effectively.

You next question comes from the line of Daniel Meron from RBC Capital Markets.

Thanks, Eran, Efrat and congrats on joining on Board. Can you quantify for us the extent of Alvarion's business in 2010 and also how this flows into 2011, I realized that there maybe some shifts in the timing. I mean if you can quantify how this year and next years should look like that will be very helpful? Thank you.

As you know, we did not provide anymore guidance for 2010 and we certainly didn't comment in terms of specific incurred numbers about 2011. I think be new to the company, I believe it's premature for me to provide specific comments on this point and beyond might be new, it's also the global environment, the credit situation, the global credit crises, the [special] awards and such that introduce level of uncertainty not in terms of the market opportunity, but in terms of timing of when various initiatives and it's not just India and the U.S., I want to make sure that we don't mislead you, it's in a number of other countries as well, but the concrete timing of specific opportunities is something that is hard to predict and even when we do predict. I know very well from past experiences with other companies these things tend to move around, usually to slip unfortunately but they do move around and so it'll be somewhat irresponsible on our part to provide very concrete guidance for the year and for 2011. I will just reiterate, Daniel, what I shared with all of you before in my comments on the call, and that is that regardless of India and the U.S., but certainly fused by what I see happening or that is expected to happen in India and the U.S., I see very real demand for wireless broadband, I see WiMAX as the technology as an industry being very relevant to what the world needs, I see Alvarion is being very relevant and very well positioned to go after these opportunities. So, I'm not giving you a very concrete timing based answer, but I do believe in this market, I do believe in the company and the team, I believe in the technology, the installed base and the customer relationships that Alvarion has worked long and hard to establish in nurture. I'm confident that we're well position to capitalize on the opportunities presented by this fascinating market, when they are presented to us.

And just moving on, maybe if you can provide us with color on the sizes of the contract that you guys are looking at right now? And also what is the profitability profile of sound those major contracts in India and elsewhere that you are competing for this in the state level side, be it Asia or Europe or elsewhere?

It is a question I have asked myself from day one in December since I joined. When I heard about these opportunities, it's a very large range and I don't want to mislead you and provide anything that might be interpreted in a wrong manner, if I give you a very concrete number. Some of the opportunities that Alvarion goes after are six digit opportunities. So I wouldn't call them very substantial in size. We have seven digit opportunities we are looking at, we have eight digit opportunities we are looking, frankly in the market not in all countries, but in the more densely populated countries and I think you can guess which ones these are. There are potentially nine-digit opportunities out there. How quickly these will materialized? What will be our Alvarion share if any when they materialize? These are all flings that are unclear at this point. Some of these customer by the way, some of these operators may vary well Q2 divide their business whether it be by market by, if I use a term that in India they have used in the past by circle, by sector, by city, by geographical region, they main choose to device their business up and give it to a number of providers of WiMAX technology and WiMAX networks. So I'd rather tell you the following and not make any kind of predictions very concrete projections about these opportunities. We will do everything we can, and we are doing everything we can and will continue to work on strengthening and improving our competitive positioning in the market, vis-à-vis the competition to be able to number one benefit from any one of these large opportunities, whether it be as sole provider of the relevant technology and services or is one of a…

Your next question comes from the line of Jonathan Goldberg from Deutsche Bank.

Just a couple of sort accounting and finance questions. Efrat, on the range of EPS guidance, it seems pretty wide range other than the revenue, the range of revenue guidance, is there anything other factors that could swing profitability strong one way or the other?

No, as I said before, I think we've been in situation where we've provided in the past year one of the quarter's we had $10 million range rather than eight in the previous quarter for example and really mainly we're very depend on milestones of success since of deployment of getting approval from customers of meetings certain milestones or development features that we're not depend on us on our action. So, it's mainly our ability to predict whether or not it would be completed on time for the end of the quarter.

And then on the competitive front, I know you talked a little bit about the Chinese vendors were follow in GT, and you've mentioned anything else about the other competitors are there have been any changes in the last 60 days in that front?

Well we actually did mention GT specifically, but I did mention the Chinese competition.

Right, other than how the competition period?

The competition is still there, people are interested in the opportunities and we see different competitors and sometimes the same competitors in different opportunities then some focus on certain geographies and some focused on specific type of opportunities not everybody has products to offer in all frequency. So, it depends on the opportunities we may or may not see a particular competitor based on the scope or the specification of the opportunity.

And I add to that with some historical perspective it maybe, I think in the mix of competition has change if you look back year ago not the 60 days as U.S., but certainly if you look at year ago and compare to now think we hasn't change, but it's a developed and it's a different competition.

Your next question comes from the line of Ilya Grozovsky from Morgan Joseph. Please go ahead.

Can we just go in to the operating expenses little bit obviously you guys have done pretty good job of controlling them, why do you think they can go over the next several quarters, I mean how much lower can you bring the operating expenses? Thanks.

My focus, the team's focus at this point in time following the number of measures taken by the company 2009 to reduce operating expenses that the focus right now is on strengthening the competitive positioning to focus on growing the top line to capitalize on the market opportunities. We think that with the reduction in operating expenses and by the way some of it was done in Q4. So, we'll see some of the impact in 2010 starting with this quarter Q1 not all of it actually have we didn't benefit to the full extent in Q4 itself from that, but right now the focus is not on further cost cutting measures, but its really on strengthening the positioning and just going after business and delivering business and making customers happy and moving on from there.

So how we bottomed out in Q1 on the cost cutting?

Well, its again if its we operate we're publicly traded company and we want to look after our shareholders interest and our customers interest and our employees interest and we'll do what we need to do to run the business effectively and we've announced in the past the management with (inaudible) announced in the past that we do view operating profitability as being important I mentioned this in my opening remarks and this is certainly has not changed, we would expect to Q1 guidance it certainly important to us we'll continue to be important to us and we want to achieve and maintain operating profitability in the future. Having said that you work to achieve operating profitability you can look at the top line, you can look at the expense and the company as you indicated Ilya has done a good job and 2009 its not necessarily a pleasant exercise, but you've done a good job and taking the responsibility seriously and adopting the cost structure and the operating expense level to what the company saw in terms of business levels and at this point in time, I want focus on the top line and the opportunities with the premise and the notion being that we'll have operating leverage utilizing or benefiting from the lower expense freight if we manage to if and when we manage to grow our top line, so right now the focus is on the market the customers, the opportunities, the capabilities of the company and to benefit from the market opportunities.

Your next question comes from the line of Steve Ferranti from Stephens Incorporated.

Just wanted to ask you in terms of a March quarter obviously the mid point guidance down sequentially, can you give us some insight in terms of what you think shipments do in the March quarter?

Shipments will be partially driven by closure of deals and availability of funding in particular programs materializing within the quarter itself. So the book and ship concept is something that is not unique to our Alvarion, but certainly is part of our business to what extent this will be part of our business in this quarter remains to be seen. So I can't give you any concrete guidance in this regard is to shipments. We will see as the quarter evolves and we certainly have product to ship based on past quarters deals and in this quarter based on current quarter sales we'll ship additional product. So it's hard to predict at this point in time with any high degree of certainty.

Okay, that's fair enough. And then, I know March at least historically has been a seasonally down quarter in this business, I'm not sure how seasonality even comes into play given the broader economic picture here, but do you think is June typically seasonally stronger quarter for you guys based on what you've seen thus far?

Seasonality does play a role here, you're absolutely right. And again it's not unique to our company, but it's an accurate statement. It's hard to tell again when we look at the second quarter as to what the business performance will be there, Efrat and I shared during the call, we're expecting a number of business catalysts to materialize, we are building the pipeline, we're working with the teams to marketing, the sales teams in to regions to develop the opportunities and to close business. And Q2, as you know very well will be partially impacted by sales in Q1. So it remains to be same, we believe that there are the fundamental growth drivers are there, we know that the demand is certainly out there in the market. It's the timing that makes it somewhat challenging to provide more specific, more concrete guidance and at this point in time, I would be very careful in terms of commenting on Q2 performance. I want to focus on Q1 and do the best job we can to have a successful quarter.

I understand. Last one from me, I guess for Efrat, you spoke about payment terms lengthening a bit. Can you give us any sort of quantify that in anyway in terms of where we were say a quarter of year ago. And where we are today in terms of payment terms?

I think it was increased quite dramatically, but then as I said is the trend, it didn't happen over night, we've always been working mainly with challengers is a typical customer for us, which usually have to bring money from the private sources bank, so in the past left from vendor financing or more extended payment terms and with the crisis with the change of the type of customers and the type of project we going and we are targeting and actually winning and deploying, altogether gets you to a situation where payment is being extended as I said either because of the stretch and the unavailability of funding or because its depended on milestones with larger project or timing of certain action with me to take place in, and payment is depended upon. So it's the trend as I don't see reason for it worsening dramatically, but it is the trend we've been following and we are very careful in taking guarantees against these extended payments or anything else we can put our hands on then very careful credit checks etcetera. In order to make sure, we don't have money.

Your next question comes from the line Scott Searle from Merriman.

Good morning, good afternoon, Eran welcome to board. Just a couple of clarifications and a couple of questions. First Efrat all I missed the name of the 10% customer and in terms of the guidance for the $50 to $60 million range in the first quarter. I just wanted to clarify a couple of big contracts so are those contracts you have to win or just a revenue recognition issue?

It could be a combination of both times. We are pursuing a number of good size deals and we are also in the mix of delivering, deploying and that works that, we've long contracts for during 2009. So, it's the combination of number as Efrat mentioned, we are looking right now the number of such components that we'll have potentially in fact from the revenue and we're doing everything we can to make good progress both on the sales front as well as on the delivery side.

But its open range or part of that assumption is open range is still expected, for second half of 2010 revenue recognition?

Well open range is certainly an important, customer and we are working with open range on deploying the network and we're making good progress there, I would not comment specifically Scott in terms of Q1 revenue about particular customer programs being part of the mixture or not, but open range is going fairly well and we're happy with that.

And Efrat the 10% customer again?

It is [Elrow] in Denmark.

Okay. Eran, looking at the Indian market and specifically the WiMAX licenses previously they had been slated to roll post the 3G awards that they were couple together. As that decoupled in the timing of WiMAX will be independent and what's going on with the 3G licenses or is that still slated to follow the conclusion of that 3G licenses. And then I guess as part B of that question, can you grow or do you expect to grow in the second half of calendar 2010, if India is not result?

So to answer your first part of the question, there is a little bit of uncertainty at this point in time as to the plans the concrete plans with the days to specific days for India to be perfectly on honest thought I've heard then I've read in the number of blogs and I've seen a number of rumors if you will floating around as past week about these specific timing of the auctions and whether it's going to follow 3G are not, I wouldn't first off hold on certainly not a quantified speaker for the Indian government, and I don't want to pretend I am, I would suggest to all over and this is what I am doing personally with our team in India we're following this very closely that this is obviously of interest to us no doubt there, we have other activities in India with other operators and under different program so it certainly not just the auction of WiMAX spectrum that is the sold trigger for a business driver in India itself, and so I would recommend and so that I know something I'm not telling just again different rumors, but just way it could be a matter of days before we get some clarity from India and we'll see and we're move from there. Second part of your question about India is important so the particular importance of the WiMAX spectrum auction related business to our second half growth we believe that we known its not just we believe we know that we have a number of areas whether it be countries or programs by geographies and general beyond the country where we see growth in the second half of 2010. This again we'll be depend on specific timing availability of funds not everything its government related, some of it is banks, private sector funding and we're in discussions with the number of customers in terms of large programs and it remains to be seeing if and when these will materialize has to the it part I am confident they will materialize. It's really more a question of when and to what extent Alvarion it's a company will benefit from these programs. So, to say specifically to answer your questions, specifically we can probably benefit from market opportunity if the overall global credit environment eases up, which I'm hopeful and I want to believe it will in the second half because this is critical beyond spectrum and auctions then another elements every credit environment improves. I believe there is a very relevant market opportunity beyond India.

Okay and last question on the non-WiMAX front, that business has been pretty stable of the past couple of quarters and now you're getting out your unlicensed WiMAX product and that is traditionally have been more of the [dusty] channel. So would you expect to see growth in that category I know you have been combine it going forward, but is that now growth opportunities for you given that you went through the stabilization in the work done by the disti channel in late 2008 to early 2009 is that become growth for you guys again?

Its true, it's a good point and it certainly something that we have team working on the unlicensed market opportunity is in the enterprise opportunity or its want to thing about it enterprise maybe misleading concept to some, it's the non carrier of the non Telco opportunity, we think it's a very fascinating opportunity in and out itself and there is lot to be said and we're kind of 10 minutes fast the hour at last to be able to give you the long answer. But its, I'll just say in brief that it is the growth opportunity we have a team focused on that and we believe that this is an important point of the overall WiMAX business and for Alvarion specifically going forward. Operator, we are ten minutes past the hour, I didn't want to cuts Scott off, but we'll wrap by the call with Scott's questions. I want to thank all of you for participating. We're going to work very hard in Q1 and going forward on strengthening our market position our competitive positioning going after the relevant opportunities for the company and capitalizing on the opportunities presented by the market and hopefully the credit environment as well as the government programs and the foremost funding stimulus and others as well as spectrum options will materialize soon rather the later and will help the WiMAX industry in Alberta in particular resume growth. Thank you very much.

Ladies and gentlemen that does conclude your conference for today. Thank you for your participation and for using AT&T executive teleconference. You may now disconnect.