January 20, 2023

Revolutionizing Africa’s Mobile Connectivity: NuRAN Wireless’ Multi-Million Dollar Agreements

Midas Letter
Midas Letter
Revolutionizing Africa's Mobile Connectivity: NuRAN Wireless' Multi-Million Dollar Agreements
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Today, we sit down with Francis Létourneau, the CEO of NuRAN Wireless (CNSX:NUR, OTCMKTS:NRRWF, FRA:1RNA), to discuss the company’s recent multi-million dollar agreements in Sub-Saharan Africa.

Mr. Létourneau gives an overview of the agreements and explains how they will impact the company’s growth and expansion in the region.

He also shares details on the financing and roll-out of the agreements and what investors can expect in the coming months.

Company Bio:

NuRAN Wireless is a leading rural telecommunications company that meets the growing demand for wireless network coverage in remote and rural regions around the globe. With its affordable and innovative scalable solutions of 2G, 3G, and 4G technologies, NuRAN Wireless offers a new possibility for more than one billion people to communicate effectively over long distances efficiently and affordably. “Bridging the Digital Divide, One Connection at a Time.”

Links & Resources:

Timestamps:

00:00 NuRAN Wireless CEO Francis Létourneau

00:54 Recent agreement updates

02:11 When shareholders can expect revenue to hit financials

04:37 Equity raise

06:20 EBITDA positive status

07:07 10,000 sites in 5 years

09:20 NAAS business model success

Transcript

James West, Midas Letter CEO: Welcome back everybody. Francis Lao rejoins us. He’s the CEO of NuRan Wireless Inc. trading on the CSE under the symbol NUR and in the United States under the symbol, NRRWF. Francis, welcome back.

Francis Létourneau, NuRAN Wireless CEO: Hello, James. How are you?

James West: I am doing fantastic. Thanks for asking. Francis Nuran has continued to announce additional agreements that are worth tens of millions of dollars across Sub-Saharan Africa. Why don’t we start with an overview of the most recent agreements that you sign in where we stand with those?

Francis Létourneau: This new agreement that was just signed is the conclusion of a long process that started a year back with those RFPs ongoing with Orange. We now stand with four, over 4,000 sites under contract for 4,500 actually. In terms of big numbers, we are at 800 million US in contracts sign with MTN and Orange for Cameroon, DRC, Sudan, South Sudan, Namibia, and now Madagascar aiming to get a couple more. So that’s a big achievement for us, and it just conclude or, I would say, emphasize the relationship that we have with those large operator and the need to get the disconnectivity over Africa from those operators.

James West: All right. So when can investors in Nuran anticipate seeing this revenue appear on the financial statements?

Francis Létourneau: This is going to be a line, of course, with the financing and part of our contracts. There’s clauses that talk about subject to financing. So it’s really important and the operator knows about that, even if they are eager to get sites yesterday. So everything is going to be aligned with financing. The next one to come is the signature of E I B loan agreement and the other D F I loan agreement for a total of 27 million in which we have contributed at the level of 6 million to ignite this 27 million financing. And there will be some more kicking in James. So we have kickoff kicked off already, the debt phase two, which is going to bring financing for an additional 15 to 1600 site, depending on the site category, in those diff in those regions. Plus some equity investor in the African business that are waiting to see more results and more site live. So we are working, it will be a financing game, and we will be working extremely hard in the next couple of weeks and months and years to bring that financing. The overall need to achieve our 10,000 site gold is 250 million of capital that need to be raised or generated by our facility to get those sites built. So back to your question, when will we see fruition of this conclusion? Yes, financing will be the key. E I b and the other DFI should kick in kick in quite rapidly. And once we are done with this and get all required documentation, the condition proceeding for signing, once we get all of this, we kick it off and we start building sites as we go. And this is going to be an ongoing process for the next five years James. So as the money kicks in, we just do more builds and so on. So we have, but we have 4,500 sites to deliver now under the contract that we have signed with the different operators.

James West: Okay. So then what portion of the outstanding financing needs to be obtained through the issuance of Nuran shares?

Francis Létourneau: So the goal has always been to bring that equity at the subsidiary level in Africa. Okay. And this is a mandate and also an objective that we’ve given ourself moving forward. The capitalization of the public companies. So Nuran corp in Canada is also extremely important. Of course, the cash generated by operation will bring back cash to cover the burn and the growth of Nuran corp. Is it possible that we do a private placement in the future? Yes, but it’s not yet on the table. So we are not planning to do this now, but we are continuing on the equity raise with the African, for the African holding structure. But we have a lot of activities with Quebec government invest my Quebec per example, or fin dev or those kind of organization that support exportation for the Quebec and Canadian government, or even for the company like us. So there’s a lot of tracks ongoing. As I said the build phase for the next 40 months is going to be extremely important and highly dependent on financing. So our key focus and key mandate now is to get those lined up in order to get more site live and generating cash to reinvest and so on. So it’s a, it’s a wheel, right? And yeah, the moment you start, then it start ramping up. And this is something that will probably see fruition. Our evaluation is that at 600, 400, between 500 and 600 site, we should be reaching EBITDA positive status which is likely to occur in 2023. So it’s a good goal that we have set for ourselves for 2023, and we will be reporting to our shareholders via monthly report on tower builds and reporting on stats and everything. So this is something that our shareholder can expect starting March once this E I B and the other DFI money kicks in so we can restart and accelerate the process of delivering new sites.

James West: Okay. so you’ve been telegraphing to the market for the last two years, more or less that you’re going to achieve, or your target is 10,000 sites over five years. You’ve now at 4,500 ish sites under license, under contract. Where are the, where are the rest of the sites gonna come from in the next two and a half years?

Francis Létourneau: Most likely in Africa, but a bit will be coming from Latin America where we have started some activities, business development activities there. But just in Africa James, there’s need for over 30,000 towers to be built in the rural Africa continent. So we, we will be there, and I think that only in Africa we can probably achieve this 10,000 site. So once we have Latin America kicking in might just increase this number. But of course, as I said, the key element is to bring the financing, and this is something that we are closing in the next few days. Fingers crossed on this thing, we’re working hard to get all CP met. We’re just back to one now to get this, this ball rolling. But yes, 10,000 site is more than achievable just in Africa by itself. And the cool thing is that, as you have seen in the past, last summer, we announced the a group framework agreement with MTN that allows us to, to tap into a buffet of over 19,000 sites for the operations of MTN across Africa. They are operating in close to 20 facilities or 20 countries now. We have four under contracts, so we can probably expect to see more of those contracts kicking in with MTN, but we’re not stopping there with their Vodafone/Vodacom Airtel you’ve got move, you have a lot of operators in Africa to tap into. We’re receiving calls. We’ve met a lot of those guys and during Africa come and we’re following up following up on those business opportunities. But to get more and more and more and more contract is good, but the financing is also key to the success of this company.

James West: Sure. So your agreements have more or less been focused around this NAAS business model network as a service. And in terms of that novelty in the industry, is that actually working out for both yourself and the providers?

Francis Létourneau: Yes. the we stand on average revenue per user acro across Africa of maybe $2 50 cents. And the way our contracts are structured is we split the revenue coming from the end user because we’ve been able to reduce dramatically the total cost of ownership, including CapEx and opex for those sites. We can make a good living out of this generating 70 close to 70% gross margin on those operation. And I think it’s close to 50% EBITDA once in full operation. And when we are achieving the 25, the 24%, 25% penetration rate on the population in terms of number of active users. But it’s a good living for both entities. And, and you know what, even for the mobile network operator at this at this time and especially early stage in the process, they’re not really worried about making money. They’re more worried about I would say meeting all the regulation obligation because they have, they pay penalties and fines for not covering the entire country. So that’s why the Nuran business model with NAAS bringing that additional connectivity or co contributing to expanding the connectivity across the continent is helping them to reduce their fines and reduce their fees and meet their objective of coverage in the country. So it’s a, we’re hitting a couple of birds with one stone by having this NAAS contract for the operator. They make money they save money. And for us, we make a fantastic business out of it and a growing business under 10 years, 15 years contract sometimes. So recurring type revenue is key to succeed in this business. Sure.

James West: All right, Francis. So it looks like 2023 is the year that everything sort of becomes cash flow positive for the company. That’s great news to hear, incredible job you’ve been doing. We are extremely excited for you going forward, and we’ll continue to follow the story. Thank for joining me today.

Francis Létourneau: Thank you, James. Thank you very much.

James West: You bet. Bye for now.

Disclosure

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