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VIRTUALISATION EFTel bullish on FY10 after heavy investment in FY09
VIRTUALISATION EFTel bullish on FY10 after heavy investment in FY09 | EFTel bullish on FY10 after heavy investment in FY09 |
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| by Stuart Corner | |
| Tuesday, 01 September 2009 | |
  
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The company said EBITDA was $1.1m in the second half after hitting a low point in September/October 2008 and that "underlying EBITDA is now growing strongly as the benefits of BroadbandNext [its DSLAM network] begin to flow through." EFTel is forecasting EBITDA of $3.6m for FY10 from revenues of $40m.It expects $34m of this to come from services on BroadbandNext, up from $27.5m this year. Over the past two years the company has invested $8m rolling out DSLAMs and says it has also incurred over $1.5m in costs transitioning customers from third-party broadband infrastructure onto its own DSLAM network. "2008-09 was a transitional year from total reliance on other suppliers to EFTel's new BroadbandNext network," the company said. "Substantial one-off expenses were incurred as existing customers were migrated on to the new infrastructure. In addition, monthly overheads have also increased however the marginal cost of providing services has fallen dramatically." "All of our competitors who have taken the leap of investing in infrastructure have been reaping the rewards," CEO John Lane said. "For EFTel, the challenge of installing equipment in scores of telephone exchanges in a very short period has been met, and the network is running beautifully and doing everything the team asks of it." Everything that is except deliver VDSL2 services which the company made much of when it announced the rollout plans in late 2007. Those plans were hopelessly optimistic because of the lack of an Australian standard to enable VDSL delivery over Telstra copper. Lane told iTWire in March: "The difficulty has been in coming up with an exchange-based protocol [for VDSL2]. The argument has got caught up in the whole NBN debate. Telstra expects VDSL2 will be only a node-based technology and won't be deployed from the exchanges. Our position is that node deployment is down the track and VDSL2 can be deployed from the exchanges today." He claimed that: "If VDSL2 was possible today from a Telstra exchange we would have a huge advantage over most of our competitors. We could fit VDSL2 cards into our Huawei DSLAMs the moment we get the go ahead." He said EFTel was not expecting this "any time soon." Despite this the company still maintains a VDSL2 section on its website which claims that VDSL2 is "about to be launched in Australia" and which invites people to register their interest in receiving the service. EFTel claims to have the sixth largest broadband footprint in Australia, covering over 150 telephone exchanges. In addition it has an exclusive arrangement to resell services on Nextep's DSLAM network. The company underwent significant management changes in the second half of the year. Lane took over from founding CEO, Simon Ehrenfeld earlier in the year and quickly brought in industry veteran Warwick Pye to head up its wholesale division (the company claims to provide whole ISP services to a quarter of Australian ISPs). Pye's appointment was followed by that of the former head of customer service at Westnet, Ryan Bunter, as the new head of customer service to lead a 'transformation project,' its Customer Focus Initiative. EFTel also offshored its business processing to a new wholly-owned centre in Malaysia.
This article first appeared in ExchangeDaily, iTWire's daily newsletter for telecommunications professionals. Register here for your free trial.
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