Pentanet Limited has secured a $2 million finance facility to fund the final payment for its 5G spectrum licence, reinforcing its growth strategy in telecommunications and cloud gaming.
- Pentanet obtains $2 million equipment finance facility from Moneytech
- Facility supports final $1.7 million 5G spectrum licence payment due July 2025
- Loan term of 4 years with fixed interest rate of 11.74% per annum
- Existing unused financing facilities of approximately $6.6 million
- Positive quarterly EBITDA supports ongoing capital investment
Pentanet's Strategic Financing Move
Perth-based telecommunications company Pentanet Limited (ASX, 5GG) has announced the securing of a $2 million equipment finance facility with Moneytech Finance Pty Ltd. This funding is earmarked primarily to cover the final $1.7 million payment for its 5G spectrum licence, a critical asset underpinning the company's next-generation wireless network ambitions.
Managing Director Stephen Cornish highlighted the strategic importance of this facility, noting it provides a flexible and immediate funding mechanism to support Pentanet's ongoing capital investment program. The loan, with a four-year term and a fixed interest rate of 11.74% per annum, will be fully funded upfront, allowing the company to meet its July 2025 payment deadline without delay.
Financial Position and Growth Prospects
Beyond this new facility, Pentanet maintains approximately $6.6 million in unused financing capacity and a healthy cash position. Coupled with a track record of continuous quarterly positive EBITDA, the company appears well-positioned to sustain growth across its core business segments, fixed wireless internet services and cloud gaming.
Pentanet’s flagship private wireless network, the largest in Perth, offers a technically superior alternative to traditional fixed-line broadband providers, delivering high-speed internet with attractive margins. Additionally, the company’s alliance with NVIDIA to bring GeForce NOW cloud gaming technology to Australia has attracted a substantial user base, exceeding 696,000 users since its 2021 launch.
Implications for the 5G and Cloud Gaming Markets
Securing this finance facility not only ensures Pentanet’s compliance with its 5G licence obligations but also signals confidence in the company’s strategic direction amid a competitive telecommunications landscape. The investment in 5G spectrum is a foundational step that could enable Pentanet to expand its service offerings and enhance network capabilities, potentially capturing greater market share.
Moreover, the company’s dual focus on telecommunications infrastructure and cloud gaming positions it uniquely at the intersection of connectivity and entertainment, sectors poised for growth as consumer demand for high-speed, low-latency internet intensifies.
Bottom Line?
Pentanet’s new financing underscores its commitment to 5G expansion and sets the stage for further growth in wireless and cloud gaming sectors.
Questions in the middle?
- How will the financing terms impact Pentanet’s cash flow and profitability over the next four years?
- What are the specific conditions precedent for drawdowns under the facility, and could they affect timing or availability of funds?
- How might Pentanet leverage its 5G spectrum licence to differentiate itself in Australia’s competitive broadband market?