MNF net profit at AU$12m following Pennytel relaunch

MNF has reported FY18 net profit of almost AU$12 million on revenue of AU$220 million.
Written by Corinne Reichert, Contributor

MNF has revealed that it is looking to launch a National Broadband Network (NBN) offering under its relaunched Pennytel brand, with the Australian retail and wholesale voice-over-IP (VoIP) provider reporting FY18 revenue of AU$220.7 million, up 15 percent from FY17.

The rise in revenue was attributed to "strong organic growth" across all segments of the business, as well as the first full-year contribution following its AU$17.5 million acquisition of conferencing provider Conference Call International (CCI) in February last year.

However, net profit was down 1.7 percent to AU$11.9 million while earnings before interest, tax, depreciation, and amortisation (EBITDA) rose by just 3 percent to AU$24.6 million following the relaunch of Pennytel and its MVNO deal with Telstra Wholesale.

"In launching this new brand, the company is leveraging its software ecosystem, experience enabling other very large household name brands, extensive niche residential marketing experience, our Telstra Wholesale MVNO agreement, and a strategic marketing partnership," MNF explained.

"The company's focus going forward will be to continue to develop the Pennytel brand, and allow the older legacy brands to gradually decline as the products reach technical obsolescence. Going forward, the company will look to launching a new NBN and voice offering also under the Pennytel brand, and consolidate all residential operations under one brand."

MNF made AU$35.4 million in revenue from its Australian Domestic Retail segment, up from AU$32 million a year ago; AU$38.3 million in ANZ Domestic Wholesale, up from AU$31.9 million; and AU$156.5 million in Global Wholesale, up from AU$134 million.

Domestic Retail, consisting of offerings across residential, small business, enterprise and government, and CCI, is still targeting NBN as a growth opportunity as people migrate over, MNF said.

MNF also pointed to its telco contract win with the Victorian government, and CCI's win to supply services under the New Zealand government's communications arm of its telecommunications-as-a-service procurement panel back in February.

"The business and network integration [of CCI] is now complete, together with capacity expansion for future growth. Additionally, new product offerings in the area of video conferencing and collaboration are under development for release in FY19," MNF said.

Domestic Retail also benefited from MNF's partnership with BroadSoft to deliver MyNetFone unified-communications-as-a-service (UCaaS) voice and collaboration services on BroadCloud to its subsidiary Symbio Networks, announced in October last year for enterprise and government customers in Australia and New Zealand.

In November, MNF also launched its MyNetFone 4G Business Mobile service, adding the offering to its business cloud communications suite.

MNF's Domestic Wholesale business, meanwhile -- including wholesale voice, wholesale managed services, wholesale aggregation services on the iBoss software platform, and software as a service -- also saw "strong growth" throughout the financial year.

Local number portability grew 22 percent to 788,000 inbound ported numbers, while direct-in-dial numbers increased to 3.2 million and iBoss subscriptions increased by 179 percent to 15,156.

Lastly, the Global Wholesale segment, including MNF's Telecom New Zealand International (TNZI) and Symbio Networks businesses, will also see expansion over the coming year.

"The Symbio Networks products are being productised and made available to the global customer base. This is expected to provide additional high-margin recurring revenue streams to the TNZI business, similar to what Symbio Networks is achieving in the Australian and New Zealand domestic markets," the company said.

MNF had purchased New Zealand telco Spark's international voice business, TNZI, for NZ$22.4 million back in April 2015, completing the purchase in June 2016 after receiving approvals from the United States government.

TNZI sells voice, data, mobile, and digital services throughout Europe, North America, Asia, and Oceania.

In March last year, MNF then announced that it would be constructing a nationwide voice network in New Zealand through its IP voice communications provider Symbio Networks, which it will wholesale to service operators and over-the-top (OTT) providers. MNF then announced a sub-wholesale MVNO deal between Symbio Networks and Telstra Wholesale a year ago.

Earlier this year, MNF additionally banded together with Amaysim, Macquarie Telecom, MyRepublic, TasmaNet, Vocus, Inabox, and Southern Phone to push for smaller telco players to gain "a seat at the table" when it comes to policy and decisions on both the NBN and 5G.

According to MNF Group CEO Rene Sugo, Communications Minister Mitch Fifield has been "patting the big three on the back for what a great job of taking the NBN complaints out of the headlines".

"Really, it just goes to show that the minister has a top three-informed view. He's not coming down to our level and understanding our issues, and that's really why we need to get together as Commpete and have a stronger voice," Sugo said in April.

"Unless we start banging the drum and banding together to get our voice heard, we're going to be ignored from a regulatory and policy framework."

Sugo added that Commpete wants to ensure the "same mistakes are not made on 5G policy".

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