Expansion into New Zealand with Kacific

RNS Number : 2864O

Bigblu Broadband PLC

08 February 2021

 

This announcement contains inside information for the purposes of Article 7 of Regulation (EU) No 596/2014 ("MAR"). Upon the publication of this announcement, the inside information is now considered to be in the public domain for the purposes of MAR.

Bigblu Broadband plc

('BBB' or the 'Company' or the 'Group')

Expansion into New Zealand with Kacific

Bigblu Broadband plc (AIM: BBB.L), a leading provider of alternative super-fast and ultra-fast broadband services, announces that it has signed an exclusive Preferred Partner Agreement (the "Agreement") with leading next-generation Asia Pacific broadband satellite operator Kacific Broadband ("Kacific") to provide a high-speed broadband internet service initially across New Zealand.

Kacific will provide internet bandwidth via its Kacific-1 satellite, which was launched in December 2019, and will provide financial support including the investment in customer terminals and marketing. In return, BBB will provide all sales, marketing and end user support functions including billing and installation of equipment.

It is anticipated that the Company will invest up to £1.0m in the first year of the Agreement as the new business scales up through the provision of in-country field operations and reseller activities as the business attracts new customers and sales. The investment will be partially offset by revenue share earned from new customers, and BBB anticipates that given the scale of the expected roll out, the project will breakeven within c.20 months of launch and will be earnings accretive thereafter.

The expansion into New Zealand will be managed from the Company's Australasian headquarters in Brisbane and will initially target up to c.3,500 new customers over the next 18 months. The revenue share model will be split across a range of broadband packages being offered through this exciting new venture with Kacific, including packages offering download speeds of up to 75Mbps. This is the first time that super-fast satellite broadband has been made available to consumers in New Zealand.

In line with all of the Company's previous ventures, the Agreement provides potential customers with an attractive pricing structure that presents a genuine alternative to comparable terrestrial broadband offerings. As a result, the Board are confident that through the Agreement, the Company will continue to increase customer volumes, recurring revenues and reduce churn rates - leading to increased profitability following the initial investment.

BBB has proven via its its experience in growing its European operations before its highly successful sale, that it has the management skills and capabilities to roll out a complex logistical expansion. Thus, management actively targeted Australasia as a region with confidence of repeating its previous successes.

The initial investment into Skymesh in Australia has enabled the Company to create a market leading, and multi award winning, presence in the region. While simultaneously growing the Company's presence in Australia, management has spent over two years researching New Zealand and the wider Australasian marketplace. Recognising the market opportunity, we have been negotiating with Kacific regarding potentially managing their high-speed broadband service across certain territories. Consequently, we are delighted that BBB has reached this agreement with Kacific and to have the opportunity to expand our reach initially into New Zealand.

The Market Opportunity

New Zealand has approximately 1.7m homes and with Fibre to the premises much lower than Europe this presents a strong opportunity for growth: the broadband market has experienced a c 5%* growth year-on-year over the last few years and this is set to expand with the launch of Kacific market leading products. The local topographic constraints limit the possibility to roll out fibre in certain regions.

With an ageing rural copper network, and unchallenged small Satellite operators, the market is ready for a new offer that will reduce the digital divide. The Kacific solution supports higher speeds and data caps than legacy satellite in New Zealand, which could allow BBB to win over existing satellite subscribers and rural households that can currently only access FWA or ADSL broadband. Bigblu has successfully pursued similar strategies in the past, entering adjacent markets to where it has existing operations.

Andrew Walwyn, Chief Executive Officer of Bigblu Broadband, commented : " We are really excited to be working with Kacific in this region. As per the European operations that we successfully sold, we aim to deliver faster, cheaper broadband with increasingly attractive data packages. Importantly, this will provide us with a basis to further grow recurring revenues and also provides an entry point into the wider Asia Pacific region."

* Source: World Data Bank, Fixed broadband subscriptions per 100 people

For further information:

Bigblu Broadband Group PLC	www.bbb-plc.com
Andrew Walwyn, Chief Executive Officer Frank Waters, Chief Financial Officer	Via Walbrook PR
finnCap (Nomad and Broker) Marc Milmo / Simon Hicks / Charlie Beeson (Corporate Finance) Tim Redfern / Richard Chambers (ECM)	Tel: [phone]
Walbrook PR (PR / IR advisers)	Tel: [phone] or
Nick Rome/Tom Cooper/Nicholas Johnson	[e-mail]

About Bigblu Broadband plc

Bigblu Broadband plc (AIM: BBB), is a leading provider of alternative super-fast and ultra-fast broadband solutions throughout Australia, the Nordics and significant parts of the UK. BBB delivers a portfolio of super-fast wireless broadband products for consumers and businesses unserved or underserved by fibre. The Group has a significant target market with 3m customers in the territories we operate in with speeds of under 4 Mbps.

High levels of recurring revenue, increasing economies of scale and Government stimulation of the alternative broadband market in the countries we operate in provide a solid foundation for strong organic growth as demand for alternative super-fast broadband services increases in the territories we operate in. 

Acquisitive and organic growth enabled BBB to grow rapidly since inception in 2008 during which time the Company completed 21 acquisitions across nine different countries. In September 2020, BBB concluded the sale of its UK and European Satellite business to Eutelsat, offering an excellent return for shareholders. With the remaining businesses -   consisting of its Australian operations (Skymesh Pty Limited), its majority interest in Quickline (QCL Holdings Limited) and its Nordics business (Bigblu Norge AS)   , BBB is extremely well positioned to continue growing as it targets customers that are trapped in the 'digital divide' with limited fibre broadband options.

BBB continues to provide customers significant ongoing services in the territories present including hardware supply, installation, pre and post-sale support billings and collections, whilst offering appropriate tariffs depending on the requirements of each end user in each territory. BBB's range of solutions includes satellite, next generation fixed wireless and 4G/5G delivering between 30 Mbps and 150 Mbps for consumers, and up to 1 Gbps for businesses.

Importantly, as core technologies evolve, and more affordable capacity is made available, BBB continues to offer ever-increasing speeds and higher data throughputs to satisfy market demands for 'video-on- demand'. Its alternative broadband offerings present a customer experience that is similar to that offered by wired broadband and the connection can be shared in the normal way with PCs, tablets and smart-phones via a normal wired or wireless router.

Kacific

Kacific is a leading next-generation broadband satellite operator. It is committed to providing universal, fast, high-quality broadband access at an affordable cost using robust technologies and an agile business model.

Founded in 2013 by a core team of senior satellite professionals, Kacific is backed by a group of investors with experience in global telecommunications and infrastructure. Its first Ka-band high throughput satellite, Kacific1, launched in 2019 to stream high-speed, low-cost, ultra-reliable broadband to rural and suburban areas of the Pacific and South East Asia.

Kacific is a wholesale business selling to telecommunications operators, internet service providers, governments and other service providers.

 

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