Does MNF Group Ltd’s deal with Telstra Corporation Ltd make it a buy?

This morning fledgling telecommunications company MNF Group Ltd (ASX: MNF) announced to the market that it had secured a mobile virtual network operator (MVNO) deal with the wholesale arm of industry behemoth Telstra Corporation Ltd (ASX: TLS).

As a result, MNF Group will now be able to expand its service suite to include 4G and 3G mobile services across its Domestic Retail and Domestic Wholesale Segments. According to the release, management believes this now enables the company to deliver a complete communications solution.

The mobile service will operate through its iBoss enablement platform, providing a 4G coverage footprint of approximately 95% and a combined 4G and 3G coverage footprint of 98.8% of the Australian population.

MNF Group’s CEO Rene Sugo had this to say on the deal:

“With more consumers bypassing the NBN and turning to ‘mobile-only’ as the alternative, we wanted to offer iBoss customers a go to market solution for reaching this growing consumer segment. For us, it’s not just about selling the services. Our iBoss mobile enablement platform provides the deep integration, automation and self-service capabilities to deliver a truly value-added solution that new market entrants are looking for.”

Although its shares are relatively flat today, I believe this is a great development and yet another reason to invest in this exciting company. As well as the MNF Group’s strong growth prospects through its VOIP offering, the company’s iBoss platform is impressive and I expect it too will drive growth.

The platform allows new mobile players to go to market in just four weeks and can activate SIM cards in just seven seconds from order placement. I would have to agree with management that this is revolutionary. Traditionally, launch times for new mobile players would run into several months or perhaps even years.

These are exciting times for shareholders of MNF Group. At 33x earnings its shares may not be cheap, but I believe its exciting growth prospects make it a great long-term investment option today.

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Motley Fool contributor James Mickleboro has no position in any stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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