Access Providers cuts losses, Unwired still spending

Melbourne business wireless broadband ISP Access Providers has slashed its debts by $1.1 million while consumer-targeting Sydney rival Unwired's net deficit swelled to $24.1 million during the 2005 financial year.

Access Providers reported "strong cash growth" for the full year ended 30 June, including $2.3 million in cash reserves on $3.9 million in customer receipts, up from $26,000 on $730,000 in customer receipts in the 2004 year.

Net operating cash flows were a surplus $1.5 million. That compared to the previous year's $100,000 deficit, the company said in a statement.

Keith Ondarchie, chief executive at Access Providers, said the ISP was being seen as a business broadband alternative to copper local loop in Melbourne, Sydney, Brisbane and Adelaide.

"Our capital investment gives Access Providers the ability to expand its customer base by
at least 40 percent without any major further capital expenditure," Ondarchie said.

Access Providers used just $1 million in capital over the full 2005 year, for such things as its network expansion to Sydney, Brisbane and Adelaide, and its $158,000 purchase of Melbourne ISP Online 2000.

"In spite of these outlays, the company still maintained a positive cash flow position of $337,000," Ondarchie said.

Access Providers was seeking further acquisitions and planned new product offerings, Ondarchie said.

Meanwhile, Unwired has continued its spectacular trajectory, reporting $12.7 million in customer receipts for the full 2005 year but continuing to bleed cash. Unwired reported a negative net operating cash flow of $24.1 million for the year.

David Spence, chief executive at Unwired, said the Sydney ISP anticipated "strong revenue growth" for future quarters as its Sydney market expansion continued. The ISP had a cash balance of $19.3 million by the end of the June quarter, he said.

Access Providers reported a cash balance at the end of the June quarter of $2.3 million.

"There have been a number of recent developments that put Unwired in a strong market position for the future," Spence said.

Spence said WiMAX would probably be ratified before the end of 2005. Unwired would start to receive WiMAX-compatible equipment from vendor partner Navini Networks early in 2006.

"The equipment, which includes modems and base stations, will be dual-mode so we can run our proprietary technology alongside WiMAX technology with no customer disruption," Spence said.

Unwired was in a "good position" to reach breakeven in Sydney with cash in the bank, he said.

"Our ongoing strong revenue growth, 38 percent for the quarter, is outstripping cost growth, which only increased 19 percent for the same period," Spence said.

Network expansion costs, capital expenditure and other costs were in line with expectations and guidance, Spence added.