Freshtel rides Tesco VoIP wave

Stuart Corner
Friday, 31 August 2007 06:24

IT Industry - Deals

ASX listed VoIP provider Freshtel (ASX: FRE) has more than doubled its revenue for 2007, to $4.6m, largely as a result of an increase in revenue from UK retail giant, Tesco, its major reseller.

Overall the company reported a net loss of $7.6m for the full year to 30 June 2007. Sales revenue, from call time, hardware royalties and license fees, increased by 165 percent to $3.4m.

CEO, Rhonda O'Donnell, said: "This was the first full year that the Tesco white label agreement was in operation and the results have been extremely pleasing...Furthermore, we expect this revenue growth to continue strongly over the next year as we realise the full potential of the Tesco contract."

Expenditure during the year increased by47percent. The company says this was largely due to investment in R&D projects including Freshtel's V2 next generation network , the converged mobile technology solution which it says is on track for commercialisation in 2008 (considerably later than originally envisaged) and enhancements to the existing product range.

In April 2007 Freshtel lost its CEO John Butkiewicz after only three months in the job. He had been appointed in January.   O'Donnell was appointed in July. She said this week: "We enter the new financial year with a new leadership team, strong prospects and the right foundations in place for growth. However, I will be reviewing some aspects of the operational expenditure with a view to improving the bottom line performance and margins in subsequent years."