Looking Forward to Launch of LinkUp Mobile
We hosted a fireside chat with CEO Brian Cox on April 23, 2024. This report contains a transcript of the conversation, which can be accessed on demand. Cox gave a brief update on the status of the ACP funding as well as a comprehensive overview of LinkUp Mobile, its new prepaid wireless offering. ACP funding remains uncertain but there are more than rays of hope for its future. With 25-30% of the US population needing help in affording internet connectivity, SURG believes, despite budgetary and funding source challenges, ACP will live on in some form or another. Management is confident of its future regardless of the direction of ACP. With the launch of its prepaid LinkUp wireless service, coupled with its strong balance sheet position (~$2 per share in cash), Cox believes Surge is in a great position regardless of ACP funding. Prepaid market is big and potentially ripe for disruption. With more than 100 million subscribers, Cox believes the prepaid market offers plenty of opportunity. LinkUp Mobile is ramping up with several competitive advantages. In addition to its novel approach to utilizing its installed base of convenience stores for distribution, LinkUp is utilizing Surge’s ClearLine Mobile for promotion and free North America roaming as a key service feature. Management featured its initial efforts to co-market certain brands with HT Hackney, a regional distributor of grocery/convenience store items that services 20k stores in 21 states across the US. Surge’s goal is to reach cash flow break-even at 100k customers by the end of 2024. While this might appear ambitious to some, Surge’s ACP business exceeded this trajectory in just a few quarters when it launched back in 2021. With a target monthly ASP similar to ACP ($30/mos) and similar unit economics ($15-18/mos), it would seem 100k to be a reasonable break-even goal.
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