Uniti Wireless Limited (ASX:UWL) is a fixed wireless broadband network, connecting residents and businesses across Australia to some of the fastest internet speeds. Its CEO Michael Simmons talks about the benefits of Uniti Wireless’ fast-speed broadband network and disrupting the internet industry.
Michael Simmons: Uniti Wireless (ASX:UWL) is a licensed telecommunications carrier investing in wireless technology. It builds fixed wireless networks. It guarantees a quality service. It guarantees its speed. It has the opportunity to capture a market where people are not happy with the quality of their existing broadband services today. Uniti (ASX:UWL) is a young company. It started in Adelaide. It has 6,000 customers and has $6 million worth of revenue. It has a reasonable footprint in Adelaide. It has built fixed wireless infrastructure that can service consumers and businesses. The opportunity is in wireless, and the opportunity is to take that technology nationally with that same rate of customer growth that they’ve achieved in Adelaide. In a short time, they’ve built 6,000 customers, and in the last 12 months, there’s been over 100 per cent increase in customers. Taking that business model nationally, I see a great opportunity for the company.
There are a number of unique opportunities for Uniti (ASX:UWL) in the market. The first, an important opportunity is the ability to provide high quality guaranteed broadband services to consumers and business because of the fixed wireless technology that’s being used by Uniti. We can guarantee a quality of service. The other opportunity is that the NBN that’s being built in Australia today to replace copper services has resulted in technology choices that cannot guarantee through put and cannot guarantee a high quality service. We’re seeing that every day in the marketplace today. The NBN network cannot deliver the purchased or advertised maximum speed because of the continued utilisation of copper. It is a premium product, and I believe in the future there may be an opportunity for premium pricing for that premium product.
Forty years in business this year, and nearly 30 of those years in telecommunications. I developed the business plan to enter telco in the late ’90s to build a telecommunications business when the market deregulated. That business today is TPG, and I was 26 years with that company. Since leaving TPG I’ve been on a number of telecommunications boards, and I’ve also been CEO at Vocus (ASX:VOC), a listed telecommunications company. My heritage’s in telco and in wireless telecommunications in particular. I met Graeme Barclay a couple of months ago and he was telling me he was contemplating joining Uniti. I’d known Graeme for 20 years and he’s had a heritage in wireless. We both met in the late ’90s when we were building wireless networks. It’s a great opportunity to work with Graeme again as chairman. He has a long history in telecommunications and in wireless.
Also, on our board is John Lindsay. He’s one of the leading telecommunications technologists in Australia today. He was instrumental in the launch and development of Internode in Australia and he was the CTO at iiNet. I think we have a strong, strong board. There is a good management team in the businesses and I look forward to continuing to grow the business both organically and inorganically by acquisition and bringing some good skills to the business to enable it to happen.
The Uniti business model has a number of key inputs into building the product. The most important is a high site. The wireless technology antennas are deployed on high sites or masts. The high sites can be towers, or buildings, mono-poles, but that is a key input. We need to get above the population above the buildings and have to have line of sight to the end consumer.
We have identified a target which we would like to acquire, partly funded from the proceeds of the listing that we’re undertaking at the moment. That target is a provider of broadband services to consumers and business. Businesses also have a non NBN network. It’s a fibre network, but that target brings to us a building footprint that has access to today, across Australia in all major capital cities, other than Adelaide where Uniti dominates. Those high sites give Uniti the opportunity to deploy network on those high sites. It’s wireless network on those high sites to expand its business nationally.
I hope to raise $18 million dollars in the IPO. A large portion of that will go to funding the acquisition, which will be earnings accretive. The merger group will be EBITDA positive post merger. The balance of the funds will be to expand the wireless footprint nationally on the back of the assets that the target brings when we conclude the acquisition, being the high sites in markets where Uniti does not trade today.