MGM Wireless Limited (ASX:MWR) CEO, Mark Fortunatow talks about the company's new agreements with Sky UK and UK shopping channel QVC, and expanded distribution across leading NZ retailers.
Rachael Jones: Hello. I'm Rachael Jones for the Finance News Network. Joining me from MGM Wireless (ASX:MWR) today is CEO Mark Fortunatow. Mark, welcome back to FNN.
Mark Fortunatow: Thank you very much for having me. Great to be back.
Rachael Jones: MGM Wireless (ASX:MWR) is rolling out Spacetalk internationally. How is this progressing?
Mark Fortunatow: Well it's going wonderfully well. A year ago we started our international rollout through New Zealand through Spark, which is the country's leading mobile network operator, and that rolling went extremely well. Spark are very happy with their results, we're very happy with the results. In fact, it went so well that we're now expanding through Spark into JB Hi-Fi, Harvey Norman, and Noel Leeming in New Zealand. We're moving from a footprint of 71 stores, through to 189 stores. We're almost tripling in distribution, which gives us the economies and scales to be able to increase our advertising. We're expecting a cracker results out of New Zealand, moving forward.
Rachael Jones: Now you've had some very big news recently. What can you tell me about your latest announcement?
Mark Fortunatow: That's the Sky UK deal. Sky is Europe's largest entertainment and telecommunications company. They've got 23 million subscribers, and a huge footprint not just in the UK but Europe as well. The exciting thing is that not only will they be selling it, but they will be selling it on a plan, which is 10 pounds per month over 36 months. That 10 pounds a month includes a device, a SIM service, and the app. It's a terrific opportunity for consumers. It's great for Sky, and of course it's wonderful for us. We are expecting to sell absolutely thousands and thousands of watches on the back of this deal.
Rachael Jones: Now let's talk about your agreement with QVC, a leading TV multichannel retailer. What can you tell me about this?
Mark Fortunatow: QVC are big. They're a premium TV shopping channel. They've got four channels, two on free TV and two on cable TV. At any point in time they've got a hundred thousand people watching their show. Now the really important thing from our point of view is they'll be producing, at their own expense, shows of 30 and 45 minutes each to promote and explain how Spacetalk works. That's very important because we've got a brand new product. Not too many people know about it, let alone how it works. They'll be promoting it on these very extensive shows at their own expense, and of course selling it as well.
Rachael Jones: Why did you look to launch the campaign in the school holidays?
Mark Fortunatow: We're in school holidays or summer holidays right now, and they'll be going back to school in a few weeks time. This is absolutely the perfect time to be launching Spacetalk because parents are getting ready to send their kids back to school. They're getting their books, their uniforms, one thing and another. This is all in that mindset of buying things for school, and Spacetalk is absolutely perfect.
Rachael Jones: Mark, what are your expectations in terms of sales over the campaign period with these new retailers?
Mark Fortunatow: Well we'll be seeing quantum growth in Spacetalk sales. In a few weeks time we will be releasing FY19 numbers which were fantastic growth. We're expecting to see quantum growth on that moving forward into this coming year. It's all about growth, growth, and growth.
Rachael Jones: Now let's take a look back at New Zealand. What have you learned in the market over there that you can apply elsewhere?
Mark Fortunatow: Well, there's a real market for Spacetalk. Parents want to stay connected to their kids. To give young kids a smartphone is irresponsible. You don't want to let your young kids have access to open internet, social media, Facebook, YouTube, apps, all those nasty things. They're just not ready for it. But they need the convenience of a mobile phone, so that's what Spacetalk does. It provides them a safe, responsible way to be connected via mobile. There's a mass market out there. It's growing and growing and growing. We're solving a real need.
Rachael Jones: Last question now, Mark. What can shareholders look out for in terms of news-flow?
Mark Fortunatow: We're continuously expanding out our distribution strategically. Obviously we'll be making announcements as those distribution agreements come onboard. We'll be updating our shareholders on revenue, on sales, and anything else that comes along the way. This is a tremendous time for the company. It's a great time for the company. I think to be a shareholder at this early stage in MGM is really a fantastic opportunity.
Rachael Jones: Mark Fortunatow, thanks so much for the update and good luck with all your new developments.
Mark Fortunatow: Thank you. Great to be on the show.