Shares of NuRAN Wireless (CSE: NUR) (OTC: NRRWF) are up 20% this week as it’s partner Raeanna, a Nigerian leading telecommunication infrastructure service provider, announced a pivotal and massive, multi-million dollar collaboration to expand mobile connectivity in Africa. The announcement comes on the heels of a $4.75M contract with Intelsat that was signed in September and cements NuRAN’s turnaround for fiscal 2020.
The NuRAN-Raeanna collaboration will utilize Raeanna’s experience and local market expertise along with NuRAN’s trusted and proven mobile wireless solutions, to set up and operate telecommunication infrastructures in rural communities in the african sub-continent. The Executive Director for Raeanna Mr. Tunji Alabi was quoted: “NuRAN’s radio access solutions have helped us achieve a much faster and better return on investment, compared to using the solutions from traditional vendors. This has been achieved while still providing the high grade of service that is expected by Mobile Network Operators, both of which are key factors in operating a successful wholesale network operator business”.
It is not yet known what the exact impact of the Raeanna deal will be to NuRAN’s bottom line but we do know, based on the November 12, 2019 news releases from NuRAN and MTN respectively, NuRAN is linking their Raeanna association with MTN’s announcement of at least 5,000 sites. In their release, MTN says that they are projecting to deploy more than 5,000 sites in rural areas across its 21 operations and will rely on an ecosystem of partners, including NuRAN, to build and maintain the sites.
Based on the lack of detail in either the NuRAN or MTN news releases, management teams appear to be cautious regarding how much revenue this deal may represent for each party or how many of the 5,000 site each party is expected to be awarded. However, based on our industry knowledge, we consider that the CAPEX of each site is somewhere between US $4,000 and $10,000 depending on a variety of factors. It then seems reasonable to infer that the 5,000 sites could represent anywhere between $20,000,000 to $50,000,000 in total contract value.
In the past, NuRAN has been responsible for partial as well as full turn-key solutions for clients. Without knowing all the details on quality or quantities of deliverables, we conservatively extrapolate that the impact of this contract to NuRAN could potentially be between USD $5,000,000 and $25,000,000. The extrapolated numbers we are inferring are not official and will obviously be the subject of quarterly financial statements and filings in the future from NuRAN.
The Raeanna deal comes after some very promising developments recently for NuRAN. On September 30th NuRAN secured a $4.75 Million contract for the complete delivery and installation of satellite-backhauled cellular sites which included tower and solar power in the Marshall Islands for Intelsat (NYSE: I). Intelsat’s Vice President and General Manager, Jean-Philippe Gillet praised NuRAN’s technology and was quoted “Together with NuRAN, Intelsat is delivering an upgrade to existing mobile coverage and expanding coverage to areas previously unconnected across the Marshall Islands. This means even more people, businesses and institutions have access to reliable connectivity in more places, including dozens of hospitals and schools, resulting in economic development as well as improvements in healthcare and education.”
The Intelsat (NYSE: I) contract was effective immediately and is scheduled to span a total of 20 months with a majority of the contract value expected to be delivered within the first six months which will be through fiscal H1 2020.
Moreover, on November 13, NuRAN was awarded a £330,000 grant by the GSMA Connected Society Innovation Fund for Rural Connectivity which will be used to test and evaluate their new, innovative mobile internet connectivity solution for unconnected rural communities in Ghana. The fund will be allocated in partnership with Vodafone Ghana and is set to run for approximately 18 months.
In fiscal and calendar 2019, NuRAN has undergone a turnaround and overcome some major managerial, operational and technological hurdles. Having successfully navigated some rough waters and subsequently booked major contracts with industry heavyweights, our opinion is that the turnaround has been successfully completed. We believe that the NuRAN management team is well on their way to delivering significant shareholder value for Fiscal 2020.