Freshtel claims 351,000 VoIP customers

Stuart Corner
Thursday, 31 August 2006 11:06

Business IT - Technology

Freshtel (ASX: FRE) which operates wholesale and retail VoIP services in the UK and retail in Australia says it had a total of 352,000 customers on its network at 30 June 2006. It claims to have added 47,000  in the three months to 30 August.

Freshtel reported a net loss after tax of $6.2 million for the year to 30 June 2006 on revenue of $1.39m, up from just $0.98 million last year. Since its inception in 2003, Freshtel says it has spent a total of $10.7 million to develop and deliver a fully operational Internet telephony network both in Australia and in the UK.

Freshtel ended the year with cash reserves of $11.36 million. (engin which had around 50,000 customers at the end of June had spent $7.4 million to 31 December 2005 in providing and marketing its VoIP service.)

In the UK Freshtel offers a 'white label' service through UK retail giant Tesco,  and through another major retailer, Argos, and a retail service.  Calls between customers on any of these services are free, even if made between different 'branded' services. However Freshtel receives a licence fee for each user and a percentage of call revenue to standard phone services.

CEO Michael Carew said: "For partners, the wider the network the better the value proposition for their customers. Remember that calls between all Freshtel customers whether Tesco, Argos or Freshtel UK and Australia are direct and free of call charges. Increasing the number of customers who can make free calls across the Voicedot [Freshtel's name for its wholesale network] network makes the Voicedot network more appealing."

Tesco, which claims to take one in very three-four pounds of retail spending in the UK, is Freshtel's biggest reseller, but Carew did not disclose the number of customers on the Tesco service.

"Tesco launched a mass market media campaign on schedule in July 2006 which has been very successful in terms of customer response and conversion to sales," he said. Tesco's commitment to the launch was highlighted by their largest ever Telecoms campaign including their first 40 second TV ad...The Tesco service has been successfully launched and will be escalated quite aggressively from here."

Freshtel is looking to replicate the same channel model in Australia but as made no announcements to date. Carew said: In the Australian market we aim to replicate this dual distribution model that is operating in the UK. In July 2006 we signed an agreement with NARTA   in Australia to facilitate the Freshtel retail service and already we have product in over 200 retail outlets. We continue to work, to develop a white label service in Australia and believe we have made significant progress in this area."

Freshtel announced in September 2005 a deal to promote its retail offering through Unwired.   That relationship was expanded in November. However Carew made no mention of it in his presentation on the company's results and there was no mention of Freshtel on the home page of the Unwired web site.

An Unwired spokeswoman told iTWire: "We still have a deal with Freshtel and the special offer isavailable in our 'My Account' hot member offers section. Our customersare, however, free to use whichever VoIP service they like but they doget a special offer if they choose to go with Freshtel."