BigAir cash flow turns positive

Stuart Corner
Tuesday, 01 April 2008 05:13

IT Industry - Strategy

Fixed wireless network operator and mobile wireless broadband reseller, BigAir Group (ASX: BGL) says it expects to achieve is first quarterly positive cash flows from operations for the quarter ending 31 March 2008.

Describing this as "an important milestone for the company," BigAir said: "The strengthening cash flows are a result of organic growth in 'on-net' revenues from ongoing customer acquisition across [our] recently expanded fixed WiMAX wireless networks in Sydney, Melbourne and Brisbane." However, its most recent results for the half year to 31 December 2007, showed resold mobile broadband services still accounting for over 60 percent of total revenues. These had declined as the company switched focus to fixed services resulting in an overall decline in revenues.

BigAir said: "The ongoing improvements in margin and revenue growth have lifted the unaudited EBITDA to more than $70,000 for the month of February. This is more than 260 percent increase above the average monthly EBITDA for the first half of the financial year which was $19,344."

In February, BigAir reported its half year results saying it was shifting focus from reselling iBurst and Unwired wireless data services to selling services on its own fixed WiMAX networks in Sydney, Melbourne and Brisbane. The BigAir network was expanded to Melbourne and Brisbane during the period and upgraded to 802.16d fixed WiMAX. The total network footprint is now approaching 10,000 square kilometres.

BigAir announced its maiden EBITDA profit of $116,067 for the half year ending 31 December 2007 - a turnaround from an EBITDA loss of $535,273 in the previous corresponding half - and said the result had been achieved through a combination of 70 percent organic growth in ‘on-net’ revenues from ongoing customer acquisition across its recently expanded fixed WiMAX wireless networks in Sydney, Melbourne and Brisbane and through a reduction in operating expenses. CONTINUED