is south africa worth 50 million this year

with the announcement on South Africa it has raised many questions.

QTK has announced it will

1....licence its DSS spectrum in SA

Since QTK were allocated the use of the spectrum for all of SA.....how does one quanitify the licence fee for this as it is necessary to run and maintain the QTK technology

2....sell the ENTIRE network within SA

since this is proprietary hardware and technology again how do you quantify the cost for the network

the rest of the revenue stream is self explainatory and is understandable.

The major question arising from this announcement is exactly how much and what premium can QTK extract for the upfront licence and for the security network???

Its a 20 year agreement.........is the licence fee worth $1 million per annum????

And what proportion of this would or could QTK extract upfront?

Secondly how much does QTK secure for the rollout of its network which is to be on a city by city basis.

200 base stations to cover all of South Africa..@ say $10 million

then you have ongoing revenues from a per customer base per month

plus finally transponder sales

assuming there would be (for the sake of discussion) 50 thousand clients in year 1

QTK would receive.....

1....transponder sales of say 50k x $150 = $7.5 million

2....revenue say 50/50 of 50k x $60 pm = $18m

which would give QTK revenue from SA of roughly $25m for the first year increasing as customer base grows and increases year over year.

Is the SA deal worth almost $50m to QTK in its first year????

all hypothetical of course but based on some known figures ie transponder costs and monitoring fees in Australia.

Naturally the customer base is the greatest unknown and to secure 50k customers in year 1 would be a big achievement but NOT impossible in South Africa.

The partner for its initial outlay of say $20m to $30m would receive

revenues from sale of transponders etc.......roughly say 50k x $300 = $15m pa

and monitoring fees of $18m

or $33m for year 1 which would almost recover intial outlay expenses

every year monitoring fees increase as customer base grows but costs remain fixed.


As i began,this is a pretty significant change in the QTK model and methodology and sure has opened up conjecture about possible/potential revenues from South Africa.

The bigger question for shareholders is WHEN will we find out?????????????????

Very very interesting times ahead.