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Telecommunications VoIP provider Engin misfires badly
Telecommunications VoIP provider Engin misfires badly | VoIP provider Engin misfires badly |
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| by Stuart Corner | |
| Friday, 25 January 2008 | |
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Page 2 of 2 Engin says it is now "better positioned to focus on its core telephony business, while still retaining the option to distribute TiVo as part of a broadband triple play. This position materially decreases [our] working capital demands and will accelerate [our] path to profitability." Featured Whitepaper
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However they should come as no surprise to anyone who has followed the company's fortunes closely during 2007. It has been evident for months that it has been burning through millions of dollars of cash, mostly from Seven to acquire customers, but at huge cost per customer. In September 2007, comparing it with rival VoIP provider, MyNetFone, iTWire observed : " One interesting comparison between the two companies is that MyNetFone managed to add 22,500 net new subscribers with a marketing spend of just $455,000. For engin to add around 30,000 cost $5.7 million in marketing expenses. Absent any means of extracting significantly more revenue from them than MyNetFone - their respective offerings are fairly similar - it would clearly take Engin a very long time to recoup this investment in customer acquisition. In the year to June 30 2007, engin increased revenues 103 percent to $17.4 million and subscriber numbers 71 percent to 77,000. However it also managed to increase its EBITDA loss from $10 million the previous year to $12.5 million. Net loss for the year was $13.8 million compared to $7.3 million in 2006 and the company managed to burn through a sizeable portion of the $26 million cash injunction from Seven. Engin has released its unaudited draft financial statements for the half-year ended 31 December 2007 showing a net loss before and after tax of $6.7 million. Engin has also announced that Ian Smith, who joined the company in September 2007, has assumed the role of chairman. His previous roles have included CEO of Yahoo!7, CEO of the Communications Group Ltd, President International for advertising company Bates Worldwide and a board director of Cordiant Communications PLC. |
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