DroneShield changes course with "watershed" UK deal
Written on the 11 September 2019 by Matt Ogg
Counter-drone technology company DroneShield (ASX: DRO) expects to shake up its sales distribution model thanks to a new partnership with UK-based global telco BT Group.
After earning just over $1 million a quarter recently due to direct sales to clients like defence companies and airport traffic management providers, DroneShield CEO Oleg Vornik (pictured) tells Business News Australia the new deal could bring a potential pipeline of a "very different order of magnitude".
BT reported more than £23 billion ($41.4 billion) in revenue last year with operations in 180 countries.
"What telcos around the world including BT have realised is that they can use their existing penetration in the market to sell security, so they've been selling things like security cameras and surveillance solutions for some time now," he says.
"Now counter-drones are something else they're turning their attention to. BT would have linkages into just about every customer you can think of, so your airports, law enforcement, border patrol, stadiums, events, etcetera."
He says while DroneShield is a global leader in the space, for most people the name doesn't mean anything. In contrast, people know the BT brand and are likely more willing to trust its choice of DroneShield as a provider than a cold call marketing pitch from the company.
"If you think of BT in terms of how much revenue they make, we're talking billions of pounds a year, so BT would not take a new product and make such a big promotion out of it for the sake of a few million dollars' worth of sales," he says.
"We're talking a potential pipeline somewhere that's very near term as well that may materialise of a very different order of magnitude to what we've been reporting to now basically selling direct into various customers."
Shares in DRO were up close to 10 per cent at $0.34 at 11am AEST.
"This is a watershed moment for DroneShield," Vornik says in a release.
"Following the Christmas 2018 events at the Gatwick airport, when rogue drones brought UK air travel to a standstill, stranded hundreds of thousands of travelers and caused tens of millions of dollars in economic damage, the UK industry and government have been actively searching for effective and cost-effective drone detection and mitigation solutions.
"For BT, this search has now culminated in a partnership with DroneShield, a global leader in anti-drone solutions.
The plan is to roll-out the technology UK-wide while Vornik also expects global sales to accelerate.
"This partnership with BT, coupled with the urgent need for the solution across the UK, cracks open for DroneShield one of the world's largest anti-drone markets that is also ahead of other countries in adopting anti-drone technologies. This is an important step-change for DroneShield," he says.
"This is the first time that a major global telecommunications provider will offer standalone drone mitigation services to its customer base.
"This marks a significant point in the counterdrone industry's development counterdrone services are now as mainstream and customer-adopted as other telecommunications services, and can be purchased from a major telecommunications carrier. DroneShield is proud to be at the forefront of this seachange in the industry."Never miss a news update, subscribe here. Follow us on Facebook, LinkedIn, Instagram and Twitter.
Business News Australia
Author: Matt Ogg