Spirit Telecom appears to be emerging as a major beneficiary of the NBN's underwhelming high-speed internet deployment. As professional investors, we're always looking for an angle to make a dollar. And one company's misstep is often another's opportunity.

Spirit Telecom (ASX:ST1) is a niche telecommunications company that wirelessly connects commercial and residential customers wanting a reliable and fast internet connection.

Spirit concentrates its residential offering to multi-dwelling users (MDUs - because the telco industry loves an acronym!) - think apartment blocks with 30-300 individual dwellings - offering a competitive and fast alternative to an NBN connection.

Unlike NBN's wired offering, Spirit uses predominantly line-of sight wireless technology to connect customer buildings. So effective is the technology, that almost 2/3 of Spirit's customers enjoy speeds above 25Mbps, compared to just 17% of NBN customers (VIEW LINK).

Clearly internet speed is a huge drawcard for customers (just ask my kids!) and ST1's connected footprint, that now includes 439 buildings and 21,000 apartments (up 27% on pcp), reflects that demand.

Importantly for investors, ST1’s compelling product offering is being translated into attractive financial metrics.

Helped by last year's acquisition of Queensland based World Without Wires, ST1 has seen their 1H18 revenue increase by 54% to $8.1m and shareholders have enjoyed EPS growth of 83% to 0.23cps.

We see the medium-term dynamics most supportive for ST1. High-density housing continues to increase (helping ST1's MDU deployment), internet speed remains a critical sales factor and the perception of NBN offering sub-par service remains top of mind for consumers.

With a current market capitalisation of just $50m (even after the recent 60% rise in the share-price this year) ST1 remains an under-researched gem taking advantage of the opportunity created from a giant's stumble.

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