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The United Networks opportunity at these levels won't last much...

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    The United Networks opportunity at these levels won't last much longer.

    Here are my thoughts on why United is a screaming buy.


    The fact that no posts exist in reply to this Operational Update shows how severely the market has missed this absolute gem of a company. There are currently only 193 views of the operational update which shows very few are aware of what these guys are doing. I know of many companies with 10,000's of views on announcements which have only a fraction of the value which UNL contains.

    Firstly, why does the opportunity exist at 10 cents per share? Let me try and take an educated guess.

    If you look at the share price graph and map it against TLS, VOC, TPM the correlation almost perfectly matches (sideways/downwards since listing).

    It is Highly Likely the market is CURRENTLY TREATING UNITED LIKE A TRADITIONAL TELCO. BUT REMEMBER United Networks is not a traditional telco. United is a white label provider of connectivity for it's corporate Customers/Partners (eg Chubb) to connect, locate and engage with the end user (eg Chubb Policy holder). In exchange for this service United receives high margin fees per user for each product (WiFi, Voice, data and text). In addition United is increasingly making more money from the Value Added services to engage with their user, including Location Based tracking, emergency messages to customers and marketing messages.

    Previously Cover-More was United's biggest corporate partner with around 2m customers in Australia.

    Post listing, United has signed up Chubb which has at least 10 times more users globally. Chubb has 54 offices around the world and is the largest listed property and casualty insurer.

    Now here are some more points around the differentiation between United and a traditional telco.

    1. United Networks pays close to ZERO, Nothing, ZILCH to acquire it's users. It's end users belong to massive corporates who maintain the relationship and use their own branding and marketing channels (eg Chubb or Amex) to sell the Wi-Fi, data or SIM product. Meanwhile companies who acquire customers B2C, even if it costs say 100 dollars per user acquisition, then the issue of customer churn still exists.

    2. The reason other telco's have been under pressure is because data, voice, text prices have gone down but past Capex and ongoing Capex spend don't go down. United is not negatively affected by this trend. As a matter of fact United has shown that it is able easily reduce Voice, Text, Data prices whilst increasing ARPU as it has already done so since listing. It is also not materially affected by any telco Capex as these costs are absorbed by the infrastructure providers.

    3. The key value driver for United is really the value it adds to the Corporate customer/partner. What is it worth to Chubb or AMEX to know exactly where each of its customers is at any one point in time? What is the value of this real time data using GAP? In the update you will read that in August, there was a terrorist attack in Barcelona – the insurer connected in real time to their customers. Also in Hurricane Harvey, United located all of their users in real time where each person was.

    Interested in some thoughts from others.


    Disclosure I bought at IPO and also doubled down at 12 cents per share.
 
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