Featured Company /
Urban Communications Inc.
In the Internet Service Provider (ISP) world, speed and reliability are king and queen. Traditionally, most ISPs have touted download speeds like 10, 20 or 30 mbps (megabytes per second) as fast, with premium speeds reaching upwards of 100 Mbps. If you’ve ever downloaded a whole movie at 10 Mbps, you quickly realized that is not very fast at all. As demand keeps increasing in our data-driven world, driven by a multitude of factors, such as the Internet of Things, consumers staying constantly connected and cord cutting necessitating high-speed downloads for streaming, providers are feeling the need to increase speeds while remaining competitive with costs.
The answer in theory is simple: make fast faster. This is also known as Giga-speed Internet, where download speeds are in excess of 1,000 Mbps (equal to 1 gigabit per second (Gbps)).
From the outset, Alphabet’s (NASDAQ:GOOGL) Google Fiber was lauded as an ISP disruptor due to its Giga-speed ability that dwarfed incumbents at the time, but even the tech giant found out that a lack of infrastructure and competition’s response are formidable challenges. In that vein, majors have made large commitments in recent years to build out fiber networks to meet growing demand for not only Internet, but all the communications and data transfer needs of businesses and households.
For example, Zayo Group Holdings (NYSE:ZAYO) in November 2015 paid $465 million for fiber optic network company Allstream, a subsidiary of MTS, Inc., Canada’s fourth largest provider of telecommunications services. Videotron in January 2016 bought Fibrenoire, the operator of a 4,500-kilometer fiber network in Canada, for $125 million. Also in the past two years, Canada telecom majors Bell Canada, part of BCE (TSX:BCE), and Telus (TSX:T) have each earmarked over $1 billion in capex for their fiber optic networks. In March, BCE announced its largest infrastructure project to date with the City of Montreal, saying it will invest $854 million to bring broadband fiber Internet to the city’s businesses and communities.
To that end, little Urban Communications Inc. (TSX-Venture:UBN) has built itself an enviable market position by establishing itself as one of the first companies delivering Giga-speed services to Metro Vancouver and Victoria. Through its existing infrastructure, the Vancouver-based telecom provides a full suite of Internet, voice, video and broadband products over its 300-kilometer state-of-the-art fiber optic network to commercial, residential and public sector customers across the region.
In April, Urban added a new hosted PBX phone service for commercial customers, marking the first cloud-based service to be offered to complement the company’s existing offerings. At launch of the hosted PBX service, Urban said it has already signed up 10 customers, equating to more than $10,000 in monthly recurring revenue.
The commitments and acquisition trends certainly bring to question the value of UBN, considering it is flying under the radar of investors, as measured by its $5.6 million market capitalization. In 2015, an independent third party estimated the cost to build the company’s 200 kilometers network, at $57 million.
In order to add more customers towards a goal of nearly 4,000 residential and 1,000 commercial customers by the end of 2018, Urban launched a Channel Partner Program in January to augment internal sales efforts. Competitive pricing and faster speeds are resulting in capturing additional market share for Urban.
In the latest quarter reported, ended March 31, 2017, the company generated a record $573,833 in sales, up 190% from the first quarter of 2016. Despite the increased revenue, operating expenses dropped by 3% to $918,912, a positive sign moving forward regarding spending strategies of management.
Earnings before interest, tax, depreciation and amortization (EBITDA), a measure used by management to evaluate finances, improved 52% from a loss of $672,939 in Q1 2016 to $325,916 in the recent quarter. Not surprising for a young company looking to broaden its market presence, Urban Communications operated in the red, although the overall net loss, an official accounting measure, was also trimmed, declining by $313,994 to $843,571 during the quarter.
Urban ended the quarter with $273,297 in cash on hand.
In June, Urban closed a private placement that raised $1.34 million at a premium to today’s share price and increased its loan facility by $450,000 to a total of $5,700,000, adding available cash to its coffers to continue building out its business plan.
With all that Urban Communications Inc. (TSX-Venture:UBN) has going for it, the only question becomes how long will shares of UBN be priced at today’s miniscule levels? Only time will tell, but we suspect that the company’s undervaluation may not be around for too much longer.
Corporate Snapshot:
Urban Communications Inc.
Stock Symbol:
CA
Stock Exchange:
TSX-Venture
Sector:
Communication Services
52 Week High:
$0.1050
52 Week Low:
$0.0450
Current Stock Quote / Chart / News: Click here
Information as of
July 11, 2017
In the Internet Service Provider (ISP) world, speed and reliability are king and queen. Traditionally, most ISPs have touted download speeds like 10, 20 or 30 mbps (megabytes per second) as fast, with premium speeds reaching upwards of 100 Mbps. If you’ve ever downloaded a whole movie at 10 Mbps, you quickly realized that is not very fast at all. As demand keeps increasing in our data-driven world, driven by a multitude of factors, such as the Internet of Things, consumers staying constantly connected and cord cutting necessitating high-speed downloads for streaming, providers are feeling the need to increase speeds while remaining competitive with costs.
The answer in theory is simple: make fast faster. This is also known as Giga-speed Internet, where download speeds are in excess of 1,000 Mbps (equal to 1 gigabit per second (Gbps)).
From the outset, Alphabet’s (NASDAQ:GOOGL) Google Fiber was lauded as an ISP disruptor due to its Giga-speed ability that dwarfed incumbents at the time, but even the tech giant found out that a lack of infrastructure and competition’s response are formidable challenges. In that vein, majors have made large commitments in recent years to build out fiber networks to meet growing demand for not only Internet, but all the communications and data transfer needs of businesses and households.
For example, Zayo Group Holdings (NYSE:ZAYO) in November 2015 paid $465 million for fiber optic network company Allstream, a subsidiary of MTS, Inc., Canada’s fourth largest provider of telecommunications services. Videotron in January 2016 bought Fibrenoire, the operator of a 4,500-kilometer fiber network in Canada, for $125 million. Also in the past two years, Canada telecom majors Bell Canada, part of BCE (TSX:BCE), and Telus (TSX:T) have each earmarked over $1 billion in capex for their fiber optic networks. In March, BCE announced its largest infrastructure project to date with the City of Montreal, saying it will invest $854 million to bring broadband fiber Internet to the city’s businesses and communities.
To that end, little Urban Communications Inc. (TSX-Venture:UBN) has built itself an enviable market position by establishing itself as one of the first companies delivering Giga-speed services to Metro Vancouver and Victoria. Through its existing infrastructure, the Vancouver-based telecom provides a full suite of Internet, voice, video and broadband products over its 300-kilometer state-of-the-art fiber optic network to commercial, residential and public sector customers across the region.
In April, Urban added a new hosted PBX phone service for commercial customers, marking the first cloud-based service to be offered to complement the company’s existing offerings. At launch of the hosted PBX service, Urban said it has already signed up 10 customers, equating to more than $10,000 in monthly recurring revenue.
The commitments and acquisition trends certainly bring to question the value of UBN, considering it is flying under the radar of investors, as measured by its $5.6 million market capitalization. In 2015, an independent third party estimated the cost to build the company’s 200 kilometers network, at $57 million.
In order to add more customers towards a goal of nearly 4,000 residential and 1,000 commercial customers by the end of 2018, Urban launched a Channel Partner Program in January to augment internal sales efforts. Competitive pricing and faster speeds are resulting in capturing additional market share for Urban.
In the latest quarter reported, ended March 31, 2017, the company generated a record $573,833 in sales, up 190% from the first quarter of 2016. Despite the increased revenue, operating expenses dropped by 3% to $918,912, a positive sign moving forward regarding spending strategies of management.
Earnings before interest, tax, depreciation and amortization (EBITDA), a measure used by management to evaluate finances, improved 52% from a loss of $672,939 in Q1 2016 to $325,916 in the recent quarter. Not surprising for a young company looking to broaden its market presence, Urban Communications operated in the red, although the overall net loss, an official accounting measure, was also trimmed, declining by $313,994 to $843,571 during the quarter.
Urban ended the quarter with $273,297 in cash on hand.
In June, Urban closed a private placement that raised $1.34 million at a premium to today’s share price and increased its loan facility by $450,000 to a total of $5,700,000, adding available cash to its coffers to continue building out its business plan.
With all that Urban Communications Inc. (TSX-Venture:UBN) has going for it, the only question becomes how long will shares of UBN be priced at today’s miniscule levels? Only time will tell, but we suspect that the company’s undervaluation may not be around for too much longer.
Forward Looking Statements
This report includes forward-looking statements that reflect current expectations about its future results, performance, prospects and opportunities. Urban Communications Inc. has tried to identify these forward-looking statements by using words and phrases such as "may," "will," "expects," "anticipates," "believes," "intends," "estimates," "plan," "should," "typical," "preliminary," "we are confident" or similar expressions. These forward-looking statements are based on information currently available and are subject to a number of risks, uncertainties and other factors that could cause Urban Communications Inc.'s actual results, performance, prospects or opportunities to differ materially from those expressed in, or implied by, these forward-looking statements. These risks, uncertainties and other factors include, without limitation, the Company's growth expectations and ongoing funding requirements, and specifically, the Company's growth prospects with scalable customers, and those outlined above. Other risks include the Company's limited operating history, the Company's history of operating losses, consumers' acceptance, the Company's use of licensed technologies, risk of increased competition, the potential need for additional financing, the terms and conditions of any financing that is consummated, the limited trading market for the Company's securities, the possible volatility of the Company's stock price, the concentration of ownership, and the potential fluctuation in the Company's operating results.
Disclaimer
AllPennyStocks.com feature stock reports are intended to be stock ideas, NOT recommendations. Please do your own research before investing. It is crucial that you at least look at current SEC filings and read the latest press releases. Information contained in this report was extracted from current documents filed with the SEC, the company web site and other publicly available sources deemed reliable. For more information see our disclaimer section, a link of which can be found on our web site. This document contains forward-looking statements, particularly as related to the business plans of the Company, within the meaning of Section 27A of the Securities Act of 1933 and Sections 21E of the Securities Exchange Act of 1934, and are subject to the safe harbor created by these sections. Actual results may differ materially from the Company's expectations and estimates. This is an advertisement for Urban Communications Inc. The purpose of this advertisement, like any advertising, is to provide coverage and awareness for the company. The information provided in this advertisement is not intended for distribution to, or use by, any person or entity in any jurisdiction or country where such distribution or use would be contrary to law or regulation or which would subject us to any registration requirement within such jurisdiction or country.
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