At time of writing, Sky and Space Global Ltd [ASX:SAS] is up 5%, trading at $.06.
The rise came on the back of an announcement that the company had struck a deal with two Brazilian internet and communications providers.
Sky and Space Global is a small-cap UK incorporated company that has plans to deploy nanosatellite to provide global communications infrastructure and services.
Despite a tough year, Sky and Space Global’s share price reacts to Brazil deal
It has been a difficult year for the share price of Sky and Space Global, with it down 62.5% for the year:
Like many small tech stocks in the past, it came into vogue for a short period, rocketed up and then tapered off, albeit at an elevated level.
The big question is if the company’s business model can sustain profits in the future.
The news of a deal with two Brazilian telecoms providers, AltaRede Corporation and Inovsat Telecom hints that this may be possible.
Sky and Space Global’s strategy to transform itself into a powerful profit making company hinges on its ability to deliver telecoms services to remote areas that cannot be serviced by traditional telecoms networks.
Sky and Space Global positioning itself for growth
These include rural/remote areas, or areas that have difficult terrain — two growth regions in particular are Africa and South America.
The news of a Memorandum of Understanding (MoU) being struck with AltaRede and Inovsat underpins the growth potential the company has once it has implemented its plan of launching 200 nanosatellites by 2020.
The company currently has three satellites in orbit and has signed MoUs with ‘internet of things’ engineering firm Penteon, Indian technology services company Unizen Technologies, and Jamaica’s Surge Telecom.
So while the company has yet to turn a profit, it is quickly positioning itself for future growth.
Certainly one to watch for the future.
For Money Morning
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