VTX Holdings (ASX:VTX) has in 2015 been a share price outperformer as the company moves through the final stages of acquiring NexGen Networks.
Settlement of the transaction will be around 8 to 10 weeks.
VTX last traded at $0.065, or around six times higher since the acquisition was announced.
NexGen has a clear strategy of commercialising its technology, and has a board with a proven history of client acquisition and the ability to monetise its assets.
The company has developed software technology which uses intelligent customised algorithms to optimise data flow between devices.
This facilitates faster speeds on existing hardware.
The board of NexGen includes Keaton Wallace, who is a founder and executive director of ZipTel Limited (ASX:ZIP).
ZipTel's market capitalisation has increased seven fold in just the past year.
NexGen's latest test results
NexGen has now delivered more preliminary test results of NGN Android application across key web and streaming platforms, with the delivery of the Alpha version ahead of schedule.
Key material data savings recorded:
- Facebook – up to 52% (up to 50MB per hour saved)
- Netflix – up to 53% (up to 90MB per hour saved)
- Instagram – up to 57% (up to 36MB per hour saved)
This in essence confirms that consumers can materially reduce their data usages and therefore costs on mobile.
NexGen now has a monetisation strategy under development, along with an IP protection strategy in place and evolving through the development of the Android application.
The company said that further testing is in progress focused on the collection of metrics relating to network speed and user experience optimisations on Alpha version.
Cameron Worth, technical and commercial advisor to VTX, commented:
“This further round of testing has demonstrated the technologies clear ability to reduce the data consumption across widely used consumer platforms and the ability to potentially deliver significant cost savings to the consumer.
“We’re delighted with the results achieved across the Android application in development and are encouraged that the application will deliver further efficiencies as it undergoes further development and testing ahead of the Alpha version soft launch, expected in November 2015.”
NexGen case study
NexGen has continued the development of its monetisation strategy.
The company said based on an internal analysis of infrastructure and operating costs, NexGen has devised an indicative internal pricing model, which could provide cost savings to consumers in both Australia and New Zealand via completed case studies.
Based on an average cost of between $1 and $4 per month per user for the NGN application an average consumer could save between $55 and $91 through lowering their data consumption.
This is based on an average data plan of $180 per year with consumption of 1GB of data per month and the average data savings generated by NexGen of 57%.
This alone has highlighted a possible Return on Investment of between 1200% and 4800% and Average Revenues Per User (ARPU) of between $12 and $48 per annum.
The company added that it continues to further refine and develop this strategy.
Chapters 1&2
VTX will seek approval to change its name to NexGen Networks in conjunction with the transaction, along with re-compliance with Chapters 1 and 2 of the ASX Listing Rules.
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