MP1 (ASX) Great opp

Originally posted by Jasonn ↑

Full disclosure: I’m heavily invested in MP1 and don’t have shares in SLC. It’s difficult to explain the technical differences in laymans terms but I will give it a shot.

Megaport’s market cap is 140 million there is huge upside in terms share price growth. Superloop market capitalisation of 470 million which is 100 million more than what Pipe Networks was sold for!!! Pipe had 11 years to mature and grow, Superloop has only had a couple and they don’t have the Pipe Guam cable. Superloop is a good business although, as far as I’m concerned it’s market cap is way too high and it does not have the same explosive upside Megaport represents. IMO dyor.

SLC
Is a Telco similar to Pipe Networks back in the day. The difference being they have built their fibre network across 3 Countries Australia, Singapore and Hong Kong, similar model to level 3 in the USA. They are positioning themselves as an Asia Pacific Telco. The recent purchase of BigAir has some strong synergies because they can lay the Bigair network on top of their Australian Fibre network to reduce wholesale costs. This allows them to circumvent the NBN in certain metro areas by providing wireless lass mile access (this means the connection from the network into the actual building, instead of Fibre). So they sell a combination of Fibre wholesale, Fibre Cooperate, and WAN point to point and wireless services. The wireless component is only available in Australia. They will have some tough competition in Australia competing with Vocus and TPG who both have far larger networks and both sell dark Fibre. The competition is much tougher now than 12 years ago when they launched Pipe Networks. There is also some very powerful new wireless technology coming onto the market which was a large driver for Bevan to look at purchasing BigAir, so we will see how this plays out. They are pitching themselves as an alternative to NBN in Australia with wireless. There wireless capability is limited to their Fibre network availability.

MP1
MP1 is a completely different model and business. Bevan came up with the original concept tested it in Australia and went global with it in a short space of time, it was originally intended only for Asia Pacific but it was such a success they decided to take it Global. MP1 is the only ASX listed Telco with exposure to Europe, Asia PAC and the USA’s Telco and cloud markets. In the long term Australia will become a small part of the overall business, so this is truly a global opportunity that will ride the explosive growth of Private Cloud connectivity. Megaport sell software defined private connectivity to the cloud on a per usage basis. At the click of a button you can get access to any cloud provider on the planet select your bandwidth and time frame. It’s pay as you use model which works very well because cloud computing is a pay per usage model.

Why do people shop at Westfield ? All the shops are in the one place. MP1 are building the Westfield of private cloud connectivity, all their competitors are building networks within their own networks which is limiting. For example Telstra have a similar service but it is limited to the Telstra Network, Equinix launched a similar service (not as good) in 2014, but their service is limited to the Equinix network. This service has become Equinix’s fastest growing business segment. MP1 is unique because they are an independent provider, this is the reason Digital Reality chose Megaport, they wanted to offer their customers a better product than their main competitor Equinix. Digital Reality customers connect to the entire Megaport Echo system and vice versa, this Echo system is made up of 100’s of different networks making it the largest platform on the planet. This is a scale game the larger the network the more users the more revenue. Megaport is like a snowball getting bigger and bigger by the day.

Another important difference is Superloop sell 2-5 year contracts to their customers and this is done through a salesforce, just like every other Telco. Megaport don’t sell long term contracts they sell access to a platform so their revenue grows independent of their sales force. Megaports entire business infrastructure resides in Data Centres with Dark Fibre backhaul. I’m holding this stock for at least 5 years and continue to buy more shares.

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Hi Jasonn, I followed you from TPM to MP1 and Im in today at 2.47. Although it dropped a bit to 2.42now. But anyhow, plan to stay for good so doesn't matter.
One thing i want to ask, when Megaport claims choose your speed at a click of bottom, how dose it work? It just works with current connection? regardless of ADSL or fibre? Feels like it is completely software based, then why it needs to have so many "ports"?

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Last $11.11		Change -0.030(0.27%)		Mkt cap ! $1.775B

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