Service business

Profitability of a Network-as-a-Service Business Model | Wireless NuRAN $NUR $NRRWF

Letter from Midas

Letter from Midas

Profitability of a Network-as-a-Service Business Model | Wireless NuRAN $NUR $NRRWF







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NuRAN Wireless Inc. (CNSX: NUR, OTCMKTS: NRRWF) is a network infrastructure company that provides connectivity in the most remote places on earth. Its technology has been in use for years, having been deployed in the harshest environmental conditions globally and proven to be exceptionally reliable. The technology offers ideal solutions for rural areas that have never seen the Internet due to the low cost, ease of installation, and lack of maintenance required.

NuRAN has boldly changed its business plans by selling its products to disrupt the billion dollar Network as a Service (NaaS) industry with its recurring revenue model. Instead of a traditional transactional exchange for its technology, NuRAN has now partnered with Africa’s largest telecommunications and satellite communication companies to deliver its solutions across the African continent.

The NaaS model helps telecommunications companies expand and upgrade their existing networks to meet coverage obligations and capacity needs without significant capital investment. Instead, NuRAN partners pay a service fee, either a revenue share model or a fixed OPEX model with guaranteed minimums.

Looking at the most recent financial statements, investors will see a decline in corporate earnings. This change in business model is the reason. But this shift in business is also the reason NuRAN is expected to become profitable later this year and successfully close the connectivity gap around the world.

“We have gone from selling equipment to a network as a service. We therefore decided to leave aside the potential revenue from CAPEX sales to focus on NaaS contracts. That’s why you see we just stopped selling the product, we’re using the product ourselves, and that’s why we’re not pursuing the opportunity to sell the product, and that’s why revenues have declined. You can expect the same over the next two quarters until we reach up to 450 sites delivered, which could happen at the end of the third quarter. This is where you will see the company return to positive EBITDA. – Francis Létourneau, CEO of NuRAN Wireless

With NuRAN’s initial assumption of operating 10,000 sites over the next five years, revenues are expected to be $250 million per year with an EBITDA of 50%, or $125 million. However, these figures are conservative compared to incoming data from NuRAN sites already in operation in Cameroon and DRC.

The NaaS business model also involves the use of loan facilities to finance the construction of NuRAN sites. NuRAN announced last month that it secured a senior credit facility with a development finance institution (DFI) to fund a portion of NuRAN’s planned installation of network infrastructure deployments. With additional DFIs and new financial partners from International Financial Institutions (IFIs), NuRAN is looking to build more towers and expand its game-changing business model.

“The target for these 2, of course, is part of the agreement with the DFIs. We go up to 850 in the DRC and an additional 120 in Cameroon. So that will be 242 plus 850, or almost 1,100. But this with what we are committing to date all equipment has been sent to cameroon and rdc and soon also to south sudan we are using our own operating cash as we speak and there is cash committed for 120 sites in DRC, 120 in Cameroon and all of these should be deployed in the weeks and months to come.- Francis Létourneau, CEO of NuRAN Wireless

Transcription

00:00 – Francis Létourneau, CEO of NuRAN Wireless $NUR $NRRWF
01:05 – Development Finance Institution (DFI) Lending Updates
02:43 – New financial partners of international financial institutions (IFIs)
04:58 – Debt Launch Package and DRC Finish/New Contract Builds
06:00 – Orange Middle East Africa Steering Committee
08:29 – Cost of capital debt structure
10:17 – How many more future towers?
12:09 p.m. – Decline in revenue due to shift to NaaS business model

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