Millions gone in a Woosh

Wireless internet operator Woosh burned through $21 million in the last financial year as it hung on in the telecommunication market.

The result is on a par with previous years - the company has reported losses around the $20 million mark for the past five years.

In a letter to shareholders, chairman Rod Inglis said delivering returns was taking longer and costing more than originally planned.

"We do, however, believe a solid and realistic opportunity for the business remains," he said.

He blames the high cost of building a network on the Resource Management Act and the need to re-purchase suitable radio spectrum from the Government.

Woosh is seeking more investment to move away from its current wireless technology, which offers download speeds of up to 1.6 megabits per second and is not supported by vendors, to build a WiMAX-based network.

The company has long promised to break even and Inglis said it was now close to that point, with no debt, and aimed to become profitable in the coming months.

"The business is focused on maintaining our customer base while tightly controlling costs. Revenue is slightly up and the company strives to live within its means while continuing to provide our customers with better service and greater reliability."

Cornerstone investor Bahrain-based Kuwaiti Finance House, which lifted its shareholding in the company by 40 per cent last November, is looking to inject further funding.

"When funding is secured, we have the expertise available to create an exciting WiMAX-based alternative to current broadband networks available in New Zealand," said Inglis.

But the company will face further challenges as Telecom and Vodafone boost their mobile networks and Long Term Evolution emerges as the technology of choice for mobile broadband.