Australian-born broadband facilitator NetComm Wireless (ASX: NTC) has signed a purchase agreement with Bell Canada, the largest communications company in Canada, to deliver high-speed broadband services to various rural communities starting in Ontario and Quebec, before moving onto other regions in the country.
Headquartered in Sydney, Australia NetComm has an operational history of 35 years and maintains offices in the US, UK and New Zealand. Its deal with Bell Canada represents a significant milestone with investors reacting positively to the news.
NetComm shares rose as high as A$1.34 at market open this morning (a gain of 12%) and were trading at A$1.30 at the time of writing, 9% higher compared to yesterday’s close of A$1.19 per share.
Telco deal in detail
Bell Canada has signed a “product purchase agreement” for NetComm to supply its “intelligent fixed wireless access” devices using its fixed wireless technology. NetComm’s unique selling point is its ability to provide a practical and economical alternative to fibre, cable and copper networks.
According to NetComm, its fixed wireless technology delivers broadband speeds to regional, remote and outer urban areas over 4G LTE networks worldwide. Network operators and carriers can quickly extend robust network grade broadband connectivity to hard-to-reach areas around the world and deliver ultra-fast speeds and triple play services with guaranteed service level agreements.
Bell Canada has tapped NetComm for exactly this feature-set and technological capability with a strong likelihood that this deal could provide significant recurring revenues for NetComm, given Bell Canada’s large market footprint and significant customer base.
The two parties have not revealed specific unit volumes relating to their deal, although NetComm has announced that “this product purchase agreement will generate significant revenues in the coming financial years.”
NetComm also confirmed that it anticipates initial deliveries of its intelligent fixed wireless access devices to occur in the next financial year, subsequent to attaining normal customer acceptance and required Canadian regulatory approvals.
“This contract win with Bell Canada follows a successful four-month in-field trial and builds on our previous fixed wireless contract wins with Ericsson/NBN in Australia and AT&T in the US. It is another key milestone in the growth of our international footprint servicing tier one telecommunications carriers in developed markets,” said Ken Sheridan, chief executive officer and managing director of NetComm Wireless.