Following on from the news that Vocus Telecommunications Ltd (ASX: VOC) has proposed a friendly merger with Amcom Telecommunications Ltd (ASX: AMM), could BigAir Group Limited (ASX: BGL) be next?
BigAir provides microwave wireless broadband networks for corporates, and has also expanded into community broadband, providing broadband services for universities and most recently retirement living. BigAir is also looking at providing WiFi services for councils, shopping centres and says its potential target market is over 82,000 small to medium sized businesses and 6,000+ mid-sized businesses across Australia.
A company that may take a closer look at BigAir may surprise you. Speedcast International Ltd (ASX: SDA) provides remote and offshore locations with high speed internet through satellite communications, such as oil rigs, shipping vessels, remote mining operations and small islands.
Much of BigAir's target market is located in and around Australia's capital cities, so a tie up between Speedcast and BigAir would not cannibalise their existing operations, but allow the merged company to offer microwave or satellite broadband services depending on where the customer was located and the type of service they wanted. Both companies are focused on the business end of the market, so don't really compete with retail broadband providers.
Both BigAir and Speedcast also offer cloud hosting and network management services, so there could be synergies there as well as opportunities to cross sell services.
Telstra Corporation Ltd (ASX: TLS) could also be an acquirer of BigAir. The telco has recently announced that it wants to rollout a national wifi network for use by its customers, with other telcos' customers paying a fee to access the network. Telstra could see BigAir as a quick and cheap way of rolling out that wifi network into our capital cities.
The only fly in the ointment for Telstra is that the Australian Competition and Consumer Commission (ACCC) would likely take a dim view of the giant telco making any acquisitions to expand its market.
As a part owner of BigAir, I'd be quite happy with a tie-up with Speedcast.
