Spirit Telecom Signs Second Million-dollar deal with Victorian State Government

  • May 27, 2019 AEST
  • Team Kalkine
Spirit Telecom Signs Second Million-dollar deal with Victorian State Government

Spirit Telecom Limited (ASX: ST1) is part of the telco industry based in Australia. It develops its inhouse cutting-edge fixed wireless network. ST1 aims to provide super-fast wireless internet and cloud-based business solutions to its customers. For homes, the internet speed ranges from twenty-five Mbps to five hundred Mbps. For businesses this range is twenty-five Mbps to one Gbps, and beyond. The company was named Australia’s “Fastest Overall ISP 2015” by Pc Mag. ST1’s network covers the three biggest cities across Australia’s East Coast.

Few recent acquisitions of the company are LinkOne and Building Connect.

On 24th May 2019, the company announced that it had signed its second million-dollar deal with the Victorian State Government. The deal aims to deliver fast internet using the 5G technology in Morwell, the State’s regional town. It would enable the rural section and businesses to have seamless and fast internet access as the metropolitan, interstate and international sections enjoy. The population of the town is more than 13,000. The deal is a step towards filling in the gap between metro and regional areas.

Post an intensive tender process, the company was granted $1.1 million to complete the project. This brings in a total of $2.8 million from the State government’s contracts that ST1 has bagged in order to build sky speed networks in the regional parts of Victoria.

The company’s Sky-speed internet range is leading alternative to Fixed Wireless, which gives speed up to 1,000 Mbps. The network would be built through the company’s own IP and its engineering experience which has been developed from deploying the Fixed Wireless network through Melbourne, Gold Coast, Sydney and Brisbane.

Multiple towers would be developed in Morwell which would aid in the transmission of the company’s fast internet. ST1 would use beam-forming technology, which is tagged as the first ever ratified technology pertaining to global 5G standards. The air transmission would cover a 10km radius from each of the towers across Morwell. In the coming days, the network could bear the capacity to provide its services to Traralgon and Moe as well, outside of Morwell.

In October 2018, ST1 was provided with $1.7 million in order to provide fast speed internet that exceeded the NBN To Horsham, another regional city. The company is keen to continue work and grow, tapping the regional sections of the country with the help of the support from the Victorian government. It is exploring more opportunities to strengthen businesses in these areas.

Regarding the deal with the State government, ST1’s MD, Geoff Neate stated that the company would rest the thought process that 5G technology is only a mobile play. The deal would fulfil the customers demand for reliable and fast internet services.

A brief review of the company’s H119 release, ST1 had a small uplift in revenue to $8.2M. The gross profit was up by 9.6% YOY to $5.9M. The underlying EBITDA was recorded at $0.362M.

Financial performance summary (Source: Company’s report)

1: Underlying EBITDA excludes ongoing acquisition activity and share based payments

Share Price Information:

As on 27th May 2019, the stock is trading at A$0.197, up by 9.444%. With a market cap of A$54.58 million, the stock has generated a 6-month return of 5.88%.


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