Extends Sprint Contract Through December 31, 2012
Provides Updated Financial Outlook for Fiscal 1Q11 and Introduces Full Fiscal Year 2011 Guidance
SUNNYVALE, Calif., Sept. 20, 2010 (GLOBE NEWSWIRE) -- TeleNav, Inc. (Nasdaq:TNAV), a leading provider of location-based services, or LBS, including voice guided navigation on mobile phones, autos and enterprise LBS, today announced that the Company entered into amendments to its Master Application and Services Agreement with Sprint, its largest customer, and its License Agreement with Tele Atlas, a supplier of map and point of interest content used in TeleNav's services. As a result of the amendments, the Company is updating its outlook for the quarter ending September 30, 2010 and providing guidance for the full fiscal year ending June 30, 2011. The Company will host a conference call and webcast today at 2:00 pm PDT (5:00 pm EDT) to discuss today's announcement. Information on accessing the call and webcast are provided in this release.Sprint Agreement Highlights
- The term of the amended agreement is extended from December 31, 2011 to December 31, 2012. Sprint's right to terminate the agreement without cause has also been changed from December 31, 2010 to beginning June 30, 2012.
- TeleNav's right to be Sprint's preferred supplier of navigation applications is broadened and the preferred supplier rights are extended from December 31, 2010 to December 31, 2012. Sprint branded navigation services offered as part of a bundled offering will transition to TeleNav branded navigation services over time. In addition, bundle opportunities are expanded to include Sprint's prepaid subscriber base.
- TeleNav will receive a guaranteed annual fixed fee from Sprint for navigation applications provided to subscribers in bundles with other Sprint services. The annual fee will change from year to year over the contract period and limits the maximum number of subscribers covered under such fee in a given year. TeleNav will recognize revenue for the aggregate annual fees monthly on a straight-line basis over the term of the agreement.
- TeleNav's portion of the revenue sharing arrangements for monthly recurring charge navigation subscribers, enterprise LBS subscribers and revenue generated from mobile commerce services were increased, and will also apply to revenue generated from other premium services TeleNav may provide to bundled and other subscribers during the term of the agreement.
- The amendments to the agreement are retroactively effective as of September 1, 2010
- TeleNav will now pay fees related to navigation services provided for Sprint's bundled offerings as a percentage of fees collected from Sprint for basic navigation services and from mobile advertising and mobile commerce revenue generated thereon, rather than the previous arrangement based on monthly fees per user or per transaction fees.
- The term of the agreement remains unchanged and expires in July 2014; however, financial terms with respect to Sprint bundled offerings will expire in concert with the expiration of TeleNav's agreement with Sprint for these services.
- The amendments to the agreement are retroactively effective as of August 1, 2010.