French company Sigfox will roll out its low powered wide area network technology in New Zealand and Australia through Australian start-up Thinxtra, in which listed Kiwi high tech component manufacturer Rakon has become a cornerstone investor.
Trials of the Internet of Things (IoT) network, which provides an energy-saving alternative to existing cellular networks, are underway in Sydney and Melbourne.
Thinxtra hopes to provide coverage to 30 per cent of Australians and New Zealanders by the end of 2016, rising to 85 per cent within 18 months.
The IoT and the number of connected objects is forecast to grow exponentially in the next few years and Sigfox claims its network has the lowest deployment and maintenance costs of any system proposed, allowing lower cost subscription plans.
The Australasian move is part of Sigfox's plans to expand its network around the world, with rollouts in each country undertaken with a network partner.
Set up in 2010, the French company now operates in 14 countries.
Rakon has upped its stake in Thinxtra from 18 per cent, spending $A5.5 million to gain a 63 per cent stake although that could dilute back to just under 50 per cent if the management founder/shareholders take up outstanding options.
Thinxtra plans to raise a further $A20m through a capital raising later this year and Rakon has an option to invest another $A3m , if certain objectives are achieved.
Rakon has warned that annual earnings will miss forecast after a return to profitability in 2015 after restructuring to pull manufacturing back to New Zealand and Indian sites only.
In January, it forecast underlying earnings before interest, tax, depreciation, and amortisation of between $NZ9 million ($A8.09 million) and $NZ10m for the year ending March 31, down from a previous forecast of $NZ15.4m.
Rakon's shares recently traded at NZ25 cents and have dropped 26 per cent in 2016.
