BigAir on track to meet $1.5 million full-year profit goal

Wireless provider pinpoints new business growth coming through the channel

Wireless broadband provider, BigAir (ASX: BGL), has announced pre-tax profits of $0.85 million for the half-year to December 31.

The company said it’s fixed “on net” revenue – that obtained from business on its own network – increased by 41 per cent from the previous half year, to more than $2.3 million.

“It’s our own network, our own infrastructure and it generates good margins for the business,” BigAir CEO, Jason Ashton, said. “We’re now pretty much out of the resale business, apart from a bit of Unwired services, but the majority of our revenue and margin is on our own network, which has been growing at a pretty solid rate for the last couple of years.”

However, revenues garnered from other networks, which mainly related to its iBurst reseller business, was down 50 per cent.

Ashton said with the shut down of the iBurst network, BigAir’s forecast remained unchanged and the company was confident about reaching its pre-tax goal of $1.5 million for the full year.

The company ended the half-year with $1.9 million in cash and no debt. BigAir has also managed to reduce its operating expenses by 20 per cent through reduced sales and marketing costs.

“Most of our new business on our own network comes via our channel partners, which has a lower cost of customer acquisition for us and reduces our selling costs,” Ashton said. “We’ve got some strong channel partnerships in Sydney and Melbourne and we’re looking to expand our channel base in Brisbane. We’ll do something similar on the west coast in Perth.

The broadband provider has about 40 partners and is looking to add more system integrators, resellers, ISPs and other telco’s servicing the SME space from 25 to 500 seats.

“We’re looking to have deep relationships with channel partners that are going to work with us on a regular basis and pitch our services as an alternative to ADSL or even fibre,” he said.