Despite of all the drama, I think this is a great news.

Entering the telecom market is no big deal. Pretecting the fibre optic asset is the exciting part of this supply agreement. Companies providing fibre optic sensing technologies has been working with telecom companies for years by providing intrusion detection at telecom huts, towers and other security sites.

The nature of this kind of business has no difference from protecting a solar farm, airport or jail, which requires burying fibre optic cables as sensors.

Protecting the cable itself is another story because the asset FFT will be protecting, is the sensor by itself. If I guessed it correctly, protecting fibre optic cables for Telstra will generate small amount of inital revenue ($120k to 220k per quarter I would say), but with very high margin (80%+ will be amazing) since there's no initial installation.

Although we can't find a dollar sign in the supply agreement, I'm not too worried. Telstra will probably order Aura Ai-X when they need one with the price settled in the agreement, just like odering stationery for your office.

It's great to see how fast FFT's customers have been accepting the combination of self-adapting algorithms and real-time fibre optic sensing. There's clearly a strong demand out there with very few competitors. Machine learning is clearly becoming FFT's strongest competitive advantage. Unlike other applications, applying deep learning to fibre optic sensing (FOS) is very challenging. An fibre optic cable as a sensor, brings in huge amount of data, making data labelling very difficult. Even if a software company has the ability to label the data, it probably won't have the access to the sensitive data from security sector. Even if a company has a rich collection of labelled dataset for testing, it rarely has the software design capacity to develop AI models for FOS (I'm talking about Senstar). The only company that has the ability to deploy products like Aura Ai-X at commercial level I can think of is probably Huawei, which is technically not a competitor for obvious reasons.

The corporation with Telstra will potentially make this advantage stronger. With thousands km of cables for testing, Aura Ai-X might become one the most robust FOS AI models in the industry, and that advantage will make FFT a very unique company.

FFT has clearly made a great move and I'm pleased as a shareholder.