KEY POINTS:
Phone and internet company Woosh has posted a $24.8 million loss but is convinced it will break even for the first time this year, despite a major increase in competition.
Analysis shows the company spent an average of $1.3 million a month on acquiring cell sites and building its Auckland network, leading to its loss for the year to June 30, up from $21.8 million the previous year.
Chief financial officer Gary Neil said net revenue from customers rose 26 per cent to $9.4 million and earnings before interest, tax and amortisation was $12 million, a 19 per cent improvement on the year before. Operating revenues were down to $10.4 million from $11.4 million.
"Woosh is on track to reach ebitda breakeven on a run-rate basis by June 2007," said Neil. "The next financial year would be spent consolidating the business."
Net cash outflow had dropped from last financial year due to 30 staff redundancies and a general growth in the business.
"It has changed. We are moving the numbers in the right direction," he said.
The company, which specialises in wireless broadband, was aiming to get out of the red but Neil said there would be "some challenges" in beating the competition and building up a mix of wireless and fixed-line customers.
Observers had said that Woosh was limited with its wireless technology because it was restricted to offering download speeds of up to 1.6 megabits per second.
Many of the fixed-line internet companies were now offering greater speeds and Government plans to break open Telecom's network to competitors mid-year would give rivals the opportunity to increase speeds and capacity even more.
While Woosh had acquired fixed-line business Quicksilver, with a 10,000 customer base - its internet customers increased to 30,000 and voice customers to 7000 by September 30 last year - its main focus was developing the network to support next-generation wireless technology - Wimax.
Woosh said it could potentially lose the Wimax radio bandwidth it had acquired following a Government decision to carve up the spectrum and put it up for auction early this year.
The company had spent several million dollars acquiring management and usage rights to Wimax spectrum in the 2.3 GHZ band so it could build a nationwide wireless network and compete with Telecom and Vodafone.
"We have decided to wait for events to unfold with spectrum before making any decisions about large amounts of investment," Neil said.
Meanwhile, Callplus chief executive Martin Wylie said the company had secured $450 million from a major Japanese trading house to fund the roll-out of a national Wimax network.
It would wait to see how its trial in Whangarei developed before extending the network nationally.
