By: Tomas Ronolski - AllPennyStocks.com News

Thursday, October 17, 2013

Regional Internet companies have been getting some attention lately, including the RCN network in the greater Boston area being dubbed the best streaming service, outperforming other Internet Service Providers, or ISPs, in the first Regional Netflix ISP Speed Index Snapshot published at the end of August. “"When it comes to getting a great Internet connection in your home, our first Regional Netflix ISP Speed Index Snapshot clearly shows that a bigger ISP isn't always a better ISP," said Greg Peters, chief streaming and partnerships officer at Netflix (Nasdaq:NFLX), in a statement. Unfortunately, the Netflix index doesn’t include Canada because it’s a good gauge as to how providers are performing, but a regional provider that soon could be garnering some extra attention is Platinum Communication Corporation (TSX-Venture:PCS), a Calgary-based provider of fixed wireless Internet and Broadband solutions in Alberta. The company primarily caters to rural and near-urban customers that typically aren’t within reach of traditional ISPs. This junior is steadily building its footprint and asset base through a string of acquisitions.

In December 2011, Platinum purchased regional wireless ISP MyCanopy for an undisclosed amount to penetrate resort communities in Western Alberta. In April 2012, Platinum completed its $1.3-million acquisition of regional ISP AlbertaHighSpeed to extend its reach to communities north of Red Deer and increased its subscriber base to more than 10,000. In March this year, Platinum bought wireless ISP Community Networks Ltd. for $2.5 million, adding about 3,000 more customers in the north and east portions of Calgary.

The run continued last month with the signing of a letter of intent to acquire Hybrid Wireless, a builder of microwave transport networks, for $350,000. The transaction will only add about 400 more customers to Platinum, but, more importantly, will give the company 17 new “points of presence,” consisting of towers, shelters, transmitting gear and colocation leases in communities east of Calgary.

Platinum is at it again, on Wednesday announcing a letter of intent to spend $800,000 for the acquisition of the management group, engineering team and operating assets of Pathcom Wireless Inc., a builder of communications systems utilizing WiMAX, point-to-point microwave and fiber technologies for the telecommunications, energy and mining sectors. According to the company, Pathcom generates in excess of $3.5 million in annual recurring and project revenue from a variety of senior oil and gas producers operating in Northern Alberta and British Columbia.

This complementary acquisition allows Platinum to diversify its revenue streams, while augmenting its high capacity broadband presence in the Peace River and Fort McMurray regions.

Subject to customary conditions, the transaction is expected to close in the next three months.

In just over one year, Platinum has increased its residential customer base by about 50 percent and has now substantially increased its revenue channels. In the nine months ended May 31, the company reported revenue of $6.39 million, a 25-percent increase from the year prior quarter. Net income for the period was $395,321, or $0.0071 per share. It’s not possible to discern whether the latest acquisition will be accretive to adjusted earnings, but it is worth noting that Platinum is profitable, has cash on hand and is growing relatively quickly, while still only carrying a market capitalization of $6.16 million. At Wednesday’s close of 11 cents, shares are only up 10 percent in 2013, although hitting a high of 14 cents in September has the chart establishing a nice uptrend over the last year, making PCS a technical and fundamental stock that is worthy or additional due diligence.

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