5GN – A Rising Star in Communication Services Segment with 5G and Cloud Services' Prospects

  • Feb 14, 2020 AEDT
  • Team Kalkine
5GN – A Rising Star in Communication Services Segment with 5G and Cloud Services' Prospects

In 2020, advancements such as faster networking speeds, satellite internet, and application of enterprise 5G are expected to drive growth in the telecommunications industry.

According to Deloitte, several key trends would be shaping the technology, media, and telecommunications (TMT) industry during the year, including -

  1. Technology trends covering cloud, edge computing, Artificial Intelligence and other technologies that are facilitating research, innovation, agility and companies’ digital transformation paths. These technologies would provide thrust to the increasing importance of strategic partnerships.
  2. Trends including the establishment of infrastructure, meeting and managing customer expectations, and creating enterprise applications for 5G technology.
  3. Media & entertainment trends comprise of a continuous evolution of streaming services as well as advertising, and new prospects within sports & live entertainment.

With the arrival of 5G, people can expect access to new apps that telecom companies are trying to figure out. In the coming period, next generation solutions are anticipated to be based on 5G. Switch to the 5G network would be a boon for network, equipment, & infrastructure vendors.

In this article, we are discussing an ASX-listed player from the communication services sector with 5G and cloud services' outlook.

About 5G Networks Limited (ASX: 5GN)

5G Networks Limited (ASX: 5GN) is a licenced telecommunications carrier that operates across Australia. Its mission is to become the partner of choice for delivering a smooth digital experience for its customers across data connectivity, cloud as well as data centre services, all supported by its expert managed services.

5GN Contribution Towards Empowering Digital Capabilities

5GN has successfully catered to several clients, empowering their digital capabilities and consequently helping them in achieving key strategic goals.

Here are three of the several successfully completed client projects.

Client - Proteus Leadership

5GN was able to aid one of Australia’s premier training and leadership development companies, Proteus Leadership.

Proteus was using ADSL to facilitate its network requirements and faced challenges because of slow internet speeds. Its business requires working with professionals across the nation, and employees often conduct video conferences and webinars. With traditional ADSL, Proteus faced difficulties in hosting online meetings and video conferencing, in addition facilitating use of systems based on the cloud.

Proteus required enhanced employee efficiency, seamless video conferencing plus superfast internet speed to upload and download files. These requirements got fulfilled via the solution provided by 5G Networks Limited, enabling Proteus with symmetrical data connectivity, 100Mbps of secure internet and Australian based dedicated support along with high-performance cloud computing with superfast upload & download speeds.

Client - Guildford Grammar School

5G Network provided Guildford Grammar School with 3 full time embedded IT support staff on the Guilford Grammar campus, supporting & optimising mission critical IT systems along with daily IT operations and support. The school was experiencing increased demand in technology and with the recent major investments, IT support staff required first-class IT skills on-hand for equipment maintenance and deliver relevant strategic advice.

The school now enjoys continuity & stability with its embedded IT team, with specialists offering on-site technical support along with advice for strategic activity.

Client – A Melbourne Based Law Firm

A law firm based in Melbourne embarked on a crucial initial phase in its journey towards digital transformation with the successfully implementation the 5GN Cloud Desktop.

5GN solution included:

  • 24/7 secure access to company data and applications anytime, anywhere.
  • Australian based dedicated support.
  • Realtime collaboration tools.
  • Full Microsoft Office 365 product suite.
  • Backup, security and compliance.
  • Realtime access to business intelligence and analytics.

With the 5GN Cloud Desktop solution becoming fully operational, more than 100 employees of the mid-sized law firm are using new collaboration tools to become more responsive & enhance client engagement. Because of workflow automation plus enhanced security for remote working, the firm improved its workforce productivity dramatically and is placed well for a successful digital future.

5GN’s FY2019 Highlights:

  • 5GN’s revenue grew by 846% to $51 million as compared to FY2018.
  • EBITDA during the period increased by 421% to $3.2 million.
  • 5GN completed and integrated 3 acquisitions during the period.
  • Reported national expansion to 12 offices and 200 experienced employees.

Let’s take a look at the company’s strategies to accelerate growth in the coming years.

Growth Strategy:

Over the next two financial years, i.e. FY2020 and FY2021, 5GN’s growth strategy includes acquisition and channel expansion:

In FY2020, 5GN expects to register revenue in the range of $55 million to $65 million. Moreover, in FY2021 and beyond, executive option revenue target would be $80 million and executive option EBITDA target would be $10 million.

Operational Strategy:

Over the next two financial years, i.e. FY2020 and FY2021, 5GN’s operational strategy includes expansion and automation, respectively.

Expansion in FY2020 -

  • 5GN connected infrastructure
  • Private cloud development
  • Network Expansion (Fibre)

Automation in FY2021 and beyond –

  • Automation for infrastructure and systems
  • Network automation
  • Channel self-serve

Recent Achievement/s:

To know more about the Acquisition of Australian Pacific Data Centres Pty Ltd click here.

Introduction of Servers Australia as the initial partner read here.

Record Operating Cash Flow in Q2 FY2020

On 14 January 2020, 5GN released Q2 FY2020 results for the quarter ended 31 December 2019.

  • Record operating cash flow of $2 million during the reported period, attributed to customer migration to annuity services (high margin) and synergy implementation.
  • Cash receipts remained consistent, amounting to $14.6 million, during the quarter and $28.1 million for the 6 months to December 2019, representing an increase of 19% as compared to the previous corresponding period.
  • New & re-signed revenue stood at $4.6 million during 1H FY2020, which is an indication of the continued customer commitment & expansion of services.
  • Cash balance as on 31 December 2019 noted at $2.81 million. The company also had another $2.2 million in the form of debt to fund the targeted acquisitions.
  • Investment made in cloud network infrastructure plus fibre rollout to Sydney CBD and St Kilda Road in Melbourne resulted in capex of $843,000.
  • Completed the development of its next-generation cloud suite, comprising connectivity to numerous market-leading cloud providers for smooth access to hybrid, private & public cloud offerings. The launch is scheduled in Q3 FY2020.

The stock of 5GN has delivered a return of 13.77% in the last one month. On 14 February 2020, the stock closed the day’s trading at $0.970, with a market cap of $ 62.3 million.


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