Steady ASX debut for wireless broadband provider 5G Networks

Super-fast 5G mobile networks may be several years away but investors can get a piece of would-be telco disruptor 5G Networks today after it listed on the ASX.

5G Networks — which raised $4 million selling shares at 25c — climbed as high as 30c on its ASX debut today.

The shares fell back to 27c in Friday lunchtime trade — a premium of 8 per cent.

5G (ASX:5GN) wants to build its own wireless broadband network and cloud computing service, initially targeted at “mid-market” corporates who are not directly connected to the National Broadband Network (NBN).

Catch up with all the week’s ASX small cap news
Follow us on Facebook or Twitter
Discuss Stockhead small cap news in our Facebook group

The junior telco plans to make targeted acquisitions and build a broadband network that will eventually cover Australia’s Eastern seaboard.

Based on the 25c offer price, 5G is valued at $11 million.

“The political push behind the NBN has been to connect residential addresses — and mid-market corporates are still stuck with speeds of 10 or 20 megabytes over copper,” managing director and major shareholder Joe Demase told Stockhead.

5G Networks plans to offer speeds of up to 350 mbps in both directions.

There are around 250,000 mid-market Australian businesses with five to 199 employees, according to the bureau of statistics.

“Demand for high speed networks will only increase – we are doing more analytics, collating more big data, and receiving more information.

“If businesses had faster speeds they could put more in the cloud and be able to draw on productivity gains from cloud-based software.”

One of 5G’s points of differentiation is its installation speed. Mr Demase says 5G can set up connections in a matter of hours in many cases, as opposed to the three months it takes to install fibre.

5G has commenced its network rollout, acquiring base station sites in strategic locations on the east coast.

The first stage of the network roll out is expected to be completed by mid-2019 at a cost of about $1.4 million.

Mr Demase will be 5G Network’s major shareholder after the listing, with 15.7 million shares, giving him control over 35 per cent of the company.

Mr Demase also holds 5 million options exerciseable at 30c a share if certain targets are met and will be paid an initial salary of $220,000 plus a potential $100,000 bonus.