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Shareholders Approve Extra Engin Funds |
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Written by Adam Gosling
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Tuesday, 25 July 2006 |
VoIP service provider, engin, went to shareholders today at
an Extraordinary General Meeting to ask permission for an additional round of capital
raising. The vote was carried, clearing the way for engin to raise additional funds
to push its marketing programs and continue staffing and infrastructure builds
to accommodate what the company foresees is a coming wave of VoIP uptake.
The company's Chairman, William Jephcott, told the meeting
that since the last capital raising in January this year engin has doubled its
paying subscriber line base to 43,000 lines. This is growing at the rate of
5,000 new subscribers per month he said.
The meetings was told that the additional capital was
required to drive effective customer acquisition campaigns, support geographic
expansion, increase infrastructure, working capital and staffing levels, and to
take advantage of changing market dynamics by building a platform for
multi-service bundling and driving disruptive marketing initiatives.
Jephcott told the meeting engin has sufficient working capital
to maintain the status quo with $3 million in the bank as at the end of the
last fiscal year. However, to take advantage of the available opportunities and
change the scale of the business additional funding will be required he said.
The hope is that with increased expenditure on infrastructure
and customer care initiatives the company can grow to 100,000 subscriber lines
by June next year and to have expanded its network capacity sufficiently to
cater for as many as 250,000 subscribers.
He said engin plans to place additional shares to institutional
and sophisticated (?) investors. However, existing stock owners will also have
the opportunity to take part in a Share Purchase Plan limited to $5,000 per
shareholder.
Although 43,000 subscribers is a relatively small number,
this represents significant increases - a 573 percent growth for the full 2005/06
year.
According to figures put forward at the meeting - supplied by
market research company Market Clarity in March 2006 - Australia VoIP adoption is
still in its infancy with PC telephony subscribers reaching only 38,000 (paying
users) in 2005.
Internet telephony subscribes, which were classified as
subscribing to a full telephony service using a regular desktop handset, that
provided emergency services, directory assistance and geographic numbers was
just 44,000. These customers were paying approximately $30 per month for their
services.
Although engin is clearly dominant in this second market, it
revealed at the meeting that it is the company's intention to compete in the PC-based
telephony market as well, perhaps using the "disruptive marketing initiatives"
mentioned above.
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