Unwired deficit decreases as network expands to Melbourne

Despite a loss of $34 million for the year, things are going well for Unwired according to CEO David Spence.

The good news is this financial year's loss is 20 per cent lower than the previous year as the company continues to spend in order to build up its wireless network in Sydney and Melbourne.

Unwired's operating revenue was up 104 per cent to $23.4 million for the 12 months ending 30 June, 2006. This figure was largely made up from the sale of wireless modems and monthly service subscriptions. In the past year, subscriber numbers has increased by 90 per cent from 28,148 to 53,405.

"We are very pleased with these results. It's a good indication that we are managing this business well by doubling customer revenue while at the same time containing costs," Spence said.

Of its subscriber sign ups, 64 per cent came from its retail channel, 29 per cent from direct sales and 7 per cent from its wholesale customers.

On the downside, he said a 3 per cent churn rate was "higher than anticipated". This has been felt largely over the last six months. To combat the churn, the company is looking at changing its retail plans, refining its call centre operations to retain customers, and implementing network tools to optimise the network performance.

This year in terms of spending, the company has so far poured $6.1 million into building the Melbourne network. Work started on that in April and is expected to be live in September.

The Melbourne rollout is expected to cover 35 per cent of the city. Spence said it has been a much easier project than Sydney.

"We have learned a lot from the rollout of the Sydney network and believe we have done a better job in rolling out and designing the Melbourne network," he said. "We expect to get Sydney to the calibre of Melbourne in the next three to six months," he added.

Spence said a lot of thought is also going into how it builds the network for WiMax, which Unwired is expected to make WiMax-enabled in the last half of 2007.

It hopes to have 45 per cent of the Australian population covered with WiMax by the end of 2008.

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