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ZipTel posts net loss of AU$14m for FY16

ZipTel has reported a net loss of AU$14 million on revenue of AU$762,388 due to increased spending on R&D, marketing, and investment in its new platform.
Written by Corinne Reichert, Contributor

Australian telecommunications app provider ZipTel has announced its financial results for the year ended June 30, reporting a net loss of AU$14 million -- almost triple last year's loss of AU$5.7 million off the back of investment in its new Zipt 2.0 platform and user acquisition campaigns.

Revenue jumped by 52.8 percent year on year to AU$762,388 from last year's AU$498,981, which was attributed to the revenues generated by its calling app, Zipt.

Net assets stood at AU$805,320, down significantly from last year's AU$6.1 million.

Research and development expenses were AU$1.5 million for the year, with ZipTel saying that it will be able to "claim a material portion" of this expenditure under the Australian government's Research and Development Tax Incentive Scheme.

It also spent AU$2.4 million on marketing and distribution.

Calling it a "challenging" year, ZipTel said it is "keenly focused on realising the significant potential of the company" across both consumer, with Zipt, and enterprise, with SpeedTalk.

ZipTel said more than 10 million users have now installed Zipt on their mobile phones, beating the company's targets by nine months. The majority of users are from low-bandwidth regions such as India, South-East Asia, Latin America, and the Middle East.

The telco is focused on "building a sustainable Zipt business model" now that it has acquired mass amounts of users, especially following its selection by Samsung to integrate into its Tizen platform.

"The Samsung opportunity on Tizen will allow Zipt to grow with and become a key plank for this emerging platform," ZipTel chairman Josh Hunt said.

"The company will leverage this opportunity with its Zipt ambassadors to build the Zipt brand further, particularly in the Indian subcontinent."

In April, ZipTel announced that since launching its Ambassador Strategy in mid March, it had made AU$62,000 in revenue and reached 10 million subscribers.

ZipTel announced its "Zipt Ambassador Portal" in March, adding a third revenue stream alongside its Zipt Out low-rate calling service and its "SpeedTalk" white label enterprise service.

ZipTel generates revenue through its Ambassador Portal by serving interstitial, video, and in-feed advertising to customers making use of its Ambassador content or asking a question to an ambassador -- such as footballer Gareth Bale and cricketer Brett Lee -- via Zipt Q&A.

It also began serving "offerwalls" to customers using Zipt Out credit, to provide an alternative to monetary payments for customers using Zipt.

Calling, messaging, and video across ZipTel services remain advertising free.

ZipTel reported a net loss of AU$771,000 for the second quarter of 2015. It reported reaching 6 million users in January, which it attributed to its launch in India; Indian downloads had increased by 36 percent during December to January. ZipTel had always identified India as its core target market, due to the country operating on 2G coverage with low bandwidths.

ZipTel was launched in May 2014, with prepaid travel SIM provider AussieSim raising AU$5 million during a reverse takeover of sports merchandise company Skywards Limited. Thanks to the reverse takeover, the company was able to list on the ASX and launch its Zipt app, which received another AU$5 million in raised funds in November 2014.

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