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Annual Financial Results 30 June 2005
Unwired: leading the world
• Leading wireless broadband carrier:
• Successful launch and brand established from August 2004• Largest network of its type in the world delivered in record time and on
budget – 72 towers covering 2000 sq. km/3.5 million people• More than 28,000 customers in just over 10 months – offering wireless
VoIP and internet access
• Transitioned to full commercial operations, 79 staff, all back office systems in place:
• Revenue $13.2 million with customer numbers growing from a very small base from August
• Net loss $40.77 million reflected business transition
• On track for solid growth in a market ready for new technologies
2
Unwired today• Anticipate strong revenue growth for future quarters as we continue to
expand the business. We are in an excellent position for the future:
• $37 million Intel investment shores up expansion to other cities around Australia
• Spectrum swap with Austar sees Unwired holding the 2.3GHz and 3.5GHz spectrum for all major metropolitan areas
•The 2.3GHz/3.5GHz spectrum bands are at the core of the WiMAX mobile standard
• Sponsorship of Alan Jones Show on 2GB pivotal to marketing strategy to broaden target audience beyond early adopters. Jones undisputed Sydney talkback King
• VoIP strategy to partner with software providers on track with Freshtel partnership announcement August 05
• Now testing a PCMCIA (PC) card and will make a decision on likely timing for launch when this testing is complete
Best positioned for future wireless broadband standard – WiMAX3
National coverage
4
• New marketing campaign launched August 05
• Channel split: Retail 64%, direct 30%, wholesale 6%
• ‘Plug & play’ nature of Unwired’s service has huge appeal to most successful channel – retail
• Recent retail agreement with distributor Tecksel targets the SME market
• More than 110 retail outlets across Sydney
Unwired marketing & sales
5
Unwired Group Ltd
Financial results for full year ending 30 June 2005
Financial performance summary to 30 June 2005
2005
$’000
2004
$’000
Revenue from operations 11,492 335
CashCash deposits over 12 months or securing guarantees
17,097
2,170
19,267
67,045
439
67,484
EBITDA (26,840) (8,156)
Depreciation (15,646) (1,058)
Capex: Increase in gross PPE before depn
Total PPE assets as cost
12,495
33,290
20,795
20,795
Earnings per share (16.31) cents
(5.22) cents
7
Revenue and ARPU
Revenue Growth (half yearly)
0
2,000
4,000
6,000
8,000
Jun-04 Dec-04 Jun-05
Rev
enu
e (p
er h
alf
year
)
050001000015000
200002500030000
SIO
's
Revenue from operating activities Customers
Revenue Growth (half yearly)
0
2,000
4,000
6,000
8,000
Jun-04 Dec-04 Jun-05
Rev
enu
e (p
er h
alf
year
)
050001000015000
200002500030000
SIO
's
Revenue from operating activities Customers
8
Monthly ARPU (excl GST)
To Jun 05 To Dec 04
Retail $43.26 $46.03
Wholesale $38.74 $43.03
Financial results – trends by half year
HY to HY to HY to HY toJun-05 Dec-04 Jun-04 Dec-03$'000 $'000 $'000 $'000
Revenue from ordinary activities 7,209 4,283 321 14Expenses from ordinary activities (19,203) (19,131) (7,298) (1,195)
EBITDA (11,994) (14,848) (6,977) (1,181)
Other revenue 582 1,131 1,956 44Depreciation/Amortisation expense (8,090) (7,556) (1,055) (3)
Net Loss (19,502) (21,273) (6,076) (1,140)
HY to HY to HY to HY toJun-05 Dec-04 Jun-04 Dec-03$'000 $'000 $'000 $'000
Revenue from ordinary activities 7,209 4,283 321 14Expenses from ordinary activities (19,203) (19,131) (7,298) (1,195)
EBITDA (11,994) (14,848) (6,977) (1,181)
Other revenue 582 1,131 1,956 44Depreciation/Amortisation expense (8,090) (7,556) (1,055) (3)
Net Loss (19,502) (21,273) (6,076) (1,140)
9
Operating expenses – trends by half year
HY to HY to HY to HY toJun-05 Dec-04 Jun-04 Dec-03$'000 $'000 $'000 $'000
Provision of goods and services (modems, warehousing, credit card merchant fees, data termination) (4,924) (4,433) (35) 0Employees & Contractors (5,904) (5,040) (3,558) (226)Marketing & Product Development (2,489) (3,668) (369) (5)IT (210) (218) (592) 0Legal (1,132) (502) (189) (35)Rental (271) (228) (245) 0Network (1,454) (1,686) 0 0General and Admin (1,402) (1,854) (808) (112)Spectrum lease rental (1,417) (1,500) (1,500) (150)Borrowing costs 0 0 0 (665)TOTAL EXPENSES FROM ORDINARY ACTIVITIES (19,203) (19,131) (7,298) (1,195)
HY to HY to HY to HY toJun-05 Dec-04 Jun-04 Dec-03$'000 $'000 $'000 $'000
Provision of goods and services (modems, warehousing, credit card merchant fees, data termination) (4,924) (4,433) (35) 0Employees & Contractors (5,904) (5,040) (3,558) (226)Marketing & Product Development (2,489) (3,668) (369) (5)IT (210) (218) (592) 0Legal (1,132) (502) (189) (35)Rental (271) (228) (245) 0Network (1,454) (1,686) 0 0General and Admin (1,402) (1,854) (808) (112)Spectrum lease rental (1,417) (1,500) (1,500) (150)Borrowing costs 0 0 0 (665)TOTAL EXPENSES FROM ORDINARY ACTIVITIES (19,203) (19,131) (7,298) (1,195)
10
Balance sheet 30 June 200530-Jun-04 31-Dec-04 30-Jun-04 31-Dec-03 30-Jun-03
$’000 $’000 $’000 $’000 $’000Current assets
Cash & Receivables 17,800 31,679 67,433 89,625 795Inventory 2,003 4,849 53 0 0Other assets 5,342 4,292 4,236 1,853 0
Non-current assets Non Current Receivables 400
Property, plant and equipment 28,708 29,009 20,669 465 0Intangible assets 117,494 123,043 128,685 129,616 0
Total assets 171,747 192,872 221,076 221,559 795
Total current liabilities 4,439 5,974 12,906 7,450 480
Total non-current liabilities 236 324 325 0 0
Total liabilities 4,675 6,298 13,231 7,450 480
Net assets 167,072 186,574 207,845 214,109 315
EquityContributed equity 235,137 235,137 235,137 235,328 20,393Accumulated losses (68,065) (48,563) (27,292) (21,219) (20,078)
Total equity 167,072 186,574 207,845 214,109 315
30-Jun-04 31-Dec-04 30-Jun-04 31-Dec-03 30-Jun-03$’000 $’000 $’000 $’000 $’000
Current assetsCash & Receivables 17,800 31,679 67,433 89,625 795Inventory 2,003 4,849 53 0 0Other assets 5,342 4,292 4,236 1,853 0
Non-current assets Non Current Receivables 400
Property, plant and equipment 28,708 29,009 20,669 465 0Intangible assets 117,494 123,043 128,685 129,616 0
Total assets 171,747 192,872 221,076 221,559 795
Total current liabilities 4,439 5,974 12,906 7,450 480
Total non-current liabilities 236 324 325 0 0
Total liabilities 4,675 6,298 13,231 7,450 480
Net assets 167,072 186,574 207,845 214,109 315
EquityContributed equity 235,137 235,137 235,137 235,328 20,393Accumulated losses (68,065) (48,563) (27,292) (21,219) (20,078)
Total equity 167,072 186,574 207,845 214,109 315
11
The future - WiMAX
Wireless broadband future: WiMAX
• Wireless broadband growth accelerating because of need for simplicity, portability, and continuing move towards mobile phones away from traditional home phone. Now 18 million mobiles in Australia compared to 10 million landlines
• WiMAX will change the way people access data – moving it from a shared to personal device
• WiMAX will deliver high speed data communications across wide distances
• Benefits: mobility, global roaming, high speed access, and cheaper for companies to rollout networks
• Momentum building – Intel, Disney, Samsung, Nokia, Microsoft, Sprint and British Telecom. Ratified as standard late 2005
• WiMAX ‘modems’ built into laptops planned for 2007 – PDAs to follow. PC cards, desktop modems, and phone lines eventually redundant for people in WiMAX areas
13
Intel/Unwired to accelerate WiMAX deployment
• Intel to invest $37million in Unwired. In return it receives 82.2 million convertible notes with 45 cent conversion price
• This investment means we can fast track our network rollout and launch the Unwired service in more Australian cities in 2006
• Both companies have also agreed to jointly promote wireless broadband capabilities using WiMAX networks in Australia
• Unwired will adopt future Intel products that support the upcoming IEEE 802.16e for WiMAX solutions which will be found in both infrastructure equipment and notebooks
14
Unwired’s WiMAX advantage
• Unwired/Austar best placed locally to transition to WiMAX
• Unwired in unique position of having access to majority of WiMAX designated 3.5/2.3GHz bands in metropolitan Australia
1. Ability to obtain Navini base stations and CPEs that operate on current proprietary technology but can be easily upgraded to WiMAX in the future
2. With large amount of capacity we have we can operate existing proprietary technology and WiMAX based services concurrently – no disruption to existing customers
3. Special combiner technology from Navini means we can operate 2 base stations from same antenna – one proprietary, one WiMAX
15
The future
16
Intel Capital
StrategicStrategic FinancialFinancialIntelIntelCapitalCapital
Makes And Manages Makes And Manages Financially Attractive Financially Attractive Investments Investments In Support Of In Support Of Intel’s Strategic Intel’s Strategic
ObjectivesObjectives
Intel: Why Unwired?
• Why Unwired?– Deployment know-how and retail presence– City-wide deployment approach
• Investment objective– Advance WiMAX network deployment in
Australia– Showcase deployment model other countries
should replicate
The world is going wireless…
INFRASTRUCTURE:Voice and Data Last Mile
Wireless BackhaulWireless Service Convergence
ENTERPRISE:Unwired Offices and Factories
Connected Mobile DevicesUbiquitous Wireless Connectivity
CONSUMER:Wireless DSL (WiMAX)
Voice / Data / VideoInter-Device communications (UWB)
Streaming Video / 3D Gaming
Established Customer Demand
Established Customer Demand
WiMAX Will Meet Emerging Customer Needs
Mobile,but Narrowband
Broadband,but Fixed
Why WiMAX
Fixed & Mobile Data, Voice,
Video