Ann: Pentanet to present at upcoming conference, page-9

Morning,

Yes, there aren't any NEXUS customers yet. The amount of households who have applied for NEXUS shows how many people are sick of the rubbish NBN connection they are currently using, and are looking for a fixed wireless connection as a solution. I cant say for certain what the end results and feedback regarding NEXUS will be, but, if it is anything like the quality of the existing network/connection, then the current reviews speak for themselves. Given the quality of the current product, they have my confidence heading into the release of the NEXUS network until they show me reasons to believe otherwise. This is their bread and butter. As you say, the Geforce now side of things is the "experiment". So yes, I personally believe it will be better than any other current option at their residence.

Spotify provides free music, you pay to remove the adverts, exactly the same as Youtube and Youtube premium. Don't even get me started on making new accounts on each service to get the one month free. But again, once you get used to Spotify/Youtube without adverts, you CAN'T go back. Atleast I can't. Same as how people now accustomed to using Geforce now and playing games at 240FPS 1080p, will not be able to return to playing on an ipad or old PC without Geforce now. It would be like using an iPhone 12 for 3 months then going back to an original iPhone to save $20 a month, sure some will do it, most wouldn't. I understand your thought process somewhat. I also must add that FORNITE MOBILE is available on Geforce now, and nowhere else, keep in mind there is 12 million users of fortnite mobile (granted thats world wide) who can only play the game via our product..... This is why I like seeing 100,000 active users and CLIMBING at the current time. It means customer retention is there, people are building the habit of using Geforce now. I still think with how NEW this technology is in Australia, we need users and word of mouth. Which appears to have been successful so far. NOW is the time to convert it into revenue, because people have now built the habit and have become used to high quality gaming. Personally, I think everyone will be surprised at how many people will convert to paying subscriptions in the next 3-6 months. Only time and detailed announcements will tell. The way I see it, if the capital expended to build Geforce now was roughly $5 million as per my post in another thread, and we have 100,000 active users, and we want to turn Geforce now PROFITABLE over 12 months....

5,000,000/12 = $415,000 per month
415,000/$20 monthly fee= 20,750 users need to be paying on the full plan.

So basically 1 out of 5 of the current users need to convert to paying. This is not, by ANY stretch of the imagination unachievable. And keep in mind this is to become profitable after 12 months. This doesn't include the $420,000 revenue ALREADY generated by Geforce now, and doesnt include the "medium level" plans. And also, at these numbers after 12 months pretty much all of what is generated from then on will be PROFIT for pentanet and will be a massive boost to the balance sheet. Say the medium fee is $10 a month, with some users remaining on the $20 plan, that still doesn't spit out numbers that I see as unachievable. Given they have generated $420,000 since LATE october.....

420,000/$20 = 21,000 PAYMENTS of $20 since inception.
Its been 4 months since release.
21,000/4 = an AVERAGE of 5,250 subscribers per month. Now this would not reflect CURRENT paying subscribers because that would be on an upward trajectory, not on a flat trajectory assuming the exact same numbers pay for the service NOW as when it was FIRST created. So, I'm going to guess and say we could potentially have 7,000 CURRENT paying users this month? That seems fair to me. Assume lower to begin with, maybe 3,000 in the first month and 7,000 this month? So that means, of the remaining 93,000 (100,000-7,000) "active users", we only need an additional (20,750-7,000) 13,750/93,000 = 15% to start paying full price fees to be highly profitable in 12 months...... Obviously that increases to 30% should we assume that the medium entry subscription is $10 which I would be doubtful of at the current time, maybe $14

Watch this space, big things to come in my opinion. We will blitz past 20,750 monthly paying users by the end of the year and Geforce now will be printing money (ALL IN MY OPINION).

Your point C). I don't believe that's the plan. Yes they're throwing big numbers out there but I believe that's simply to show how SCALABLE the NEXUS product will be, not in any way showing immediate goals of 200,000 additional households.

Your point 1) I believe that's why they are initially targeting the rollout of 1,000 units (as well as household density I touched on previously). And when you say "They cannot assume they will be the only company in the world to want this equipment", I would disagree, I would say at the current time YES they ARE the only AUSTRALIAN company wanting this technology, as far as I am aware atleast. Terragraph is a facebook product, looking to enter the Australian market and they have chosen Pentanet to roll out this service. Having a HUGE partner by your side through this will certainly mitigate some of the associated risks you've outlined above.

Your point 2) Again, I think you're assuming they're wanting to go from 0-100 way too fast here. I believe the philosophy will be more of a proof of concept first, then scale the technology from there. Even with 1,000 units on rooftops, that will significantly increase product availability. Not to 200,000 homes, by 200,000/8 gives a rough increase of 25,000 extra households. Given current wireless users is 15,000, this is a significant increase of availability (yes I know that's just availability not new sign ups).

D) I will believe what the NBN does when I actually see it. Its been a shambles for the last 10+ years so when they say theye fixing it an upgrading it "this year" I have a chuckle to myself. I trust Pentanet more than the NBN in terms of delivering on their promises. Ill also add that the link you sent has every available suburb listed twice so it actually looks like more of a rollout in WA than it actually is, divide that paragraph by 2 and then its accurate.

Thanks for reading my rambling

Not advice, just opinions,

Goodluck all