BigAir cash flow turns positive

Stuart Corner
Tuesday, 01 April 2008 05:13

IT Industry - Strategy

Revenues in mobile wireless services which use other carrier’s networks (off-net) declined 28 percent during the period. BigAir said that this shift in focus had helped deliver an 18 percent reduction in cost of sales and a 20 percent reduction in operating expenses compared to the previous corresponding period. However, those half year results showed mobile services still accounting for the bulk of the company’s revenues, and as a result of the 28 percent decline in this business, total revenue fell seven percent.

For the half year to 31 December 2006 the breakdown was $3.67m mobile, $0.99m fixed and $4.66m total. For the half year to 31 December 2007 it was $2.66m mobile, $1.67m fixed and $4.33m total. The company said it had reduced the carrying value of the goodwill in relation to its Veritel subsidiary which contains the mobile businesses by $970,000 to $1,286,645.

The fixed wireless division revenues increased by 70 percent to approx $1.7 million in the six months and its gross profit contribution increased by 143 percent. The company said that, “due to strong customer growth and its network ownership which provides a fixed cost structure the margins generated in this division have increased further. Most of the network costs of service for fixed wireless broadband services are fixed and as this product line continues to expand we expect the cost of sales to grow at lower levels, thus continuing to drive margin growth.”