SP Telemedia plans set-top box & phone service

Stuart Corner
Tuesday, 22 September 2009 10:32

IT Industry - Strategy

SP Telemedia (ASX: SOT) the ISP/telco formed in April 2008 from the merger of Soul and TPG) has announced plans for a set-top box to enhance its IPTV offering and plans to launch a home phone service.

The company unveiled the plans when announcing its annual results for FY09, reporting a strong performance with $94m EBITDA and $17.7m NPAT.

The company said it would soon launch a home phone service, with line rental of $9.99 per month when bundled with an ADSL plan. Some years ago Soul bought the Comindico network - an Australia-wide backhaul IP network with interconnects in every Telstra call collection area (meaning that SP Telemedia can deliver calls to any number in Australia without having to pay wholesale rates for long distance carriage, only local termination rates. It will soon launch its own VoIP phone for $59.99. It is also promising to offer international calls at $1 for 100 minutes per month to many major destinations

TPG broadband services come with up to 30 IPTV channels - viewable via a broadband connected PC - included and the company says it is planning its own set-top box to increase user acceptance and boost uptake. No other details were given.

Both EBITDA and NPAT were ahead of guidance for $93m EBITDA and $16m profit and represent a 296 percent increase on the EBITDA of $24.9m for 07/08 and a significant turnaround on last year's $18.9m net loss after tax. For the year to 31 July 2010 SP Telemedia has given guidance of $460m revenue, $130m EBITDA (excludes amortisation of deferred subscriber acquisition costs) and EBIT of $71m.

The group has generated a net cash inflow from operations before interest, tax, capex and debt repayments during the year of $153m. It said: "This excellent cash generation included a significant improvement of $29m in working capital and has enabled the group to make repayments in the year of $81m against its bank debt facilities, including $60m in the 2nd half-year.


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