DSL kickstarts engin's business

VoIP provider records first positive EBITDA in three years

SMB telco, engin (ASX:ENG), has reported a major turnaround in its business in the 2010 financial year, notching up a record EBITDA of $0.7 million off revenues of close to $20 million.

In 2008, the company recorded an EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortisation) loss of $13 million against revenues of $19 million, and an EBITDA loss in 2009 of $1 million against revenues of close to $20 million.

While VoIP services still dominate engin’s offering, at about 92 per cent of the telco’s business, DSL services have grown strongly — 107 per cent — in the past year.

The telco recorded growth in its business and wholesale services with business services up some 21 per cent, and wholesale up 40 per cent, against the 2009 year

The telco’s customer base is dominated by residential (67 per cent), wholesale (five per cent) and business (28 per cent). Subscriber numbers were also up 4.5 per cent over 2009.

In an ASX release of its results, the company also flagged the National Broadband Network (NBN) as a major opportunity due to an expected “mass deployment” of VoIP services to replace existing PSTN voice services.

It is also expecting an increased uptake in enhanced VoIP services, opening up new revenue services.

“We are … focused on the opportunities engin will be able to capitalise on as IP services become more prevalent and we will watch with great interest the development of the National Broadband Network,” engin chairman, Ian Smith said in the ASX statement.

At a time where telco customer service is under the spotlight, engin managed to improve its customer relations, recording a four per cent reduction support and service related calls for the 2010 year to about 210,000.

The telco also recorded improved problem resolution, speed to answer and service waiting times.

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