EFTel takes Dodo on as resellers, expects financial loss

The pact follows closely on the heels of similar deals between EFTel and Nextep and Wideband, which will allow EFTel to extend its network footprint to around 140 exchanges nationally.

Simon Ehrenfeld, CEO at EFTel, said, the partnership made sense because it has the technology and Dodo possess the sales and marketing capabilities.

“BroadbandNext MSANs will support VDSL2, ADSL 2+, traditional ADSL, SHDSL corporate solutions, normal PTSN Voice Services, IP Video, VoIP and naked DSL,” he said.

However the ISP’s investment in the BroadbandNext network will have a negative effect on its expected profits for December.

“It’s expected that profit for the December half to be affected by the Australian currency devaluation, heavy investment in the growing BroadbandNext network, and a possible good-will write-down,” said Ehrenfeld.

He said considerable costs associated with the ramp-up of the network are being booked during the period.

This includes an “intense one-off” marketing campaign that was conducted in BroadbandNext network areas.

According to Ehrenfeld, given the consideration to the variability of currency and other factors, the company estimates that revenue for the first half will pass $19 million and NPAT will be a loss in the vicinity of $1.5 million to $2.5 million.

However, he is confident the company is on track to returning to positive and growing profits before tax in the second half.