Sat Sol Share Discussion Threads

[[e-mail]] 07/3/2016 13:53

all good news

[tightfist] 04/3/2016 15:07

Hi Iain,

Yes, your interpretation of the initial money flows is the same as mine. This extract from the AVN press release on 16th December is useful regarding on-going revenue sharing and potential market size:
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What support will homes receive?
Each home will receive a free installation, which is made possible by a government contribution of £350 per installation, which fully funds the equipment (a satellite modem) plus labour. That is paid directly to the chosen service provider. Thereafter the householder will pay a monthly charge to receive the service. The service provider pays Avanti 100% of the cost of the equipment and a portion of the service charge.

How do households subscribe?
The scheme is being rolled out around the country starting immediately and information will be made available by the Local Authorities. The householder can choose from a number of service providers who in turn will buy service from either Avanti or the other satellite operator on the scheme.

Which satellites will it use?
In anticipation of the scheme, Avanti put UK beams onto HYLAS 1, HYLAS 2 and HYLAS 4 so it is well prepared to address the market.

What is the project worth?
The Government has said that 300,000 homes and businesses are eligible under the initiative to benefit from the government funding on a satellite broadband service delivering up to 30Mbps. The average cost of a package is around £34 a month of which Avanti receives around half, so this is a total retail market opportunity over £120m a year. As the leading provider of Ka band satellite capacity in the UK, we would expect Avanti and its service providers to win a significant share of the business form those homes who chose to take it up. UK Broadband penetration is currently 78%.
If we assumed that one third of homes accepted the offer of free installation (the national UK average is 78%) and that Avanti gets just half of that business, (thus 38,610 homes) then Avanti’s revenues from installation and operation could be $20m per annum.
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The key part is "The average cost of a package is around £34 a month of which Avanti receives around half", which presumably means Europasat (who advised me their average contract is ~£40 pm) retain the other half. However, the cost allocation on the BT contract could be more onerous if BT are introducing a lot of volume AND Europasat are in competition with other Satellite ISP's.

I don't suppose we will ever find out the commercial terms of the BT deal, but we should expect some margin erosion on what could become a substantial part of Europasat's business?


Cheers, tightfist

[iainbarclay] 03/3/2016 13:12

As I understand things - BT bought a chunk of satellite capacity from Avanti - (see AVN RNS dated 7 Dec 2015) - BT are using resellers (inc europasat) to sell this to the public via government scheme run by local agencies - so I think the flow is...

Customer gets voucher code from local body, customer takes voucher code to europasat (hopefully), europasat sells customer some of BT's bandwidth that they've bought from Avanti.

So the end customer gets the installation and equipment for free, and SAT gets ongoing revenue from the customer :)

[tightfist] 03/3/2016 11:16

Hi Iain,

Thanks for the SharePicker link (the PodCast is Nbr: 383, SSW starts at 13 minutes). It largely confirms what I knew, (massive addressable market) and the closed period limitations.

My read of the situation is that Government organisations are assessing and awarding vouchers (AW quote: “voucher reference number from their council”); for example, my friend lives in a poorly served area and was routed to this link:
hxxp://www.connectingcambridgeshire.co.uk/

So I am still not clear where BT fits in. I was assuming that they were going to use their marketing power with “one stop shoppers” and/or use it to deflect customers who are dissatisfied with copper wire speeds in their locality. I guess they will act as a margin-sapping middleman, routing customers to SSW under some sort of white label arrangement?. broadbandchoices.co.uk site suggests BT own data coming from satellites, but don’t understand the implications of that.


It's lovely blue day here! tightfist

[falia] 03/3/2016 09:56

NEXT LEG UP

[iainbarclay] 03/3/2016 09:24

Hi tightfist...

We had the SharePickers podcast and the video from the CTO's presentation from the Cenkos day that is on Youtube - they both talk about results in March.

On the BT deal, I'm not sure this is offered directly by BT but rather through local bodies - customers need to get an access code from their local "fast broadband agency" who give them a voucher code, then they can approach ISPs, including europasat, for the installation using the code. That's just my interpretation though.

Nice to see a blue start to the day, and some sizeable buys yesterdays - all looking good :)

[[e-mail]] 03/3/2016 09:17

looking good

[tightfist] 03/3/2016 08:15

Iain,

No RNS this morning, sorry about that red herring! We now have a potential higher-low to build upon, presumably the quick-buck Daily Mail readers and the interested from Cenkos Islington have done their thing, for the time being, as have loose holders from Cleeve, though if they get impatient we could still see around 4.6p?

I wonder how long it will before BT undertake their retail launch? Have you any links to the interviews you mentioned?

Cheers. tightfist

[[e-mail]] 02/3/2016 15:30

all cables will be out of date in 10 years this is the the way forward

[iainbarclay] 02/3/2016 12:07

I don't think they've announced a date for results, but I've seen a few references in recent interviews (eg. sharepickers) to "March" - tomorrow would be good!

Selling seems to have largely dried up, and been some chunkier buys coming in lately, so we're well positioned...

[tightfist] 02/3/2016 11:55

Hi,

My ShareScope is showing some SAT results expected tomorrow, the 3rd. Does anyone know anything?(that function within ShareScope is not always the most accurate).

Cheers, tightfist

[matis0906] 02/3/2016 08:13

tightfist check your inbox, cheers

[tightfist] 01/3/2016 18:11

Hi Matis,

Yes, I think the FY2015 figures will make good reading. SSW seem to be on-a-roll, with customers numbers close to 26,000 in early Feb., and chatting about 100,000 by end of 2016, and double that by the end of 2017. One wonders what market share SSW can achieve on the Government funded (Wales, UK, Poland, France, etc) domestic installations in remoter areas. Presumably this is the main source of growth, with EU customer portfolio acquisitions following behind, and lastly organic growth.

The BT deal surely kicks-in a little later; looking at the BT site their satellite ISP offering seems to currently be “Enterprise221; focussed – the domestic launch presumably follows in a few months time?

I hope they can handle the pace of roll-out, albeit with local installers doing the physical work. Fortunately the business model will not require an awful lot of additional working capital; that's one of the investment attractions.

It's encouraging that SSW currently enjoy ~91% customer retention. Ultimately we need to be thoughtful about competition and price/margin suppression.


Cheers, tightfist

[matis0906] 27/2/2016 11:12

Sorry that should have been tightfist, predictive text can be a real pain...lol

[matis0906] 27/2/2016 11:11

Tightest, I think we have two very interesting things coming, I have no proof just a gut feeling.

1 I think the results will be very good indeed for 2015 and above expectations

2 I have a feeling that something is bubbling with this BT deal that could materialise around the same time as the results to give a real boost to the price.

All speculation just my feelings.

[tightfist] 27/2/2016 09:22

Matis,

Thanks for link though the article hardly does SSW any favours, lots of outdated info! However, maybe it can provoke some interest now, or maybe we must await some interesting numbers in the 2015 results, when published?

I do admire the accuracy of Zak Mir's piece last October. That guy does some good stuff, has anyone followed him more consistently than me?

Cheers, tightfist

[matis0906] 26/2/2016 20:39

hxxp://www.shareprophets.com/views/18936/try-the-telstar-tradition-and-probe-into-a-new-satellite-venture

[tightfist] 25/2/2016 12:13

Insight..... I see that Ofcom are pronouncing today on the future structure/requirements of BT. Speculation is that this will include a commitment to a major investment in more capable broadband/cable. Not clear in my rag whether this is SPEED on the current footprint (not a concern) or COVERAGE (extended footprint must be a medium term concern to SAT, at least in the UK).

Maybe the BT deal announced on 11/01/2016 was to pre-empt the Ofcom findings. I just wish we had insight into the commercial arrangements behind the BT deal - are there any broker's notes - or do we have to await the 2015FY numbers (Late March?) to get more info. The forecasts for 2017 seem to me a bit wimpish if they are on track for 100,000 customers by end 2016.

Cheers, tightfist

[albert3591] 23/2/2016 13:28

Another 1p off the share price then we are nearly there.

[albert3591] 13/2/2016 20:04

No man on your shoulder then,just a chip.

[hydrus] 13/2/2016 19:55

Ok, so you've just confirmed you have no insight to offer at all as I suspected. I am a holder here and I know that there are certain risks but you clearly can't even articulate them. I won't respond to you in the future as its a waste of my time.

[albert3591] 13/2/2016 18:53

It all there with the rns,s,people will initialy be buying but when there is no news the doubt will start the selling.It happens to nearly all start ups.Always that little man on your shoulder saying it will go back up.

[hydrus] 12/2/2016 21:39

Happy to hear a bear case. Tell us all your thoughts on the companies prospects. That's if you know anything about the company of course.You do realise that sitting behind a share price is an actual real company?

[albert3591] 12/2/2016 20:00

You had my thoughts as to why 4p,if that's a problem I don't mind.