Woosh works its way out of red

Gerome Garthwaite says Woosh is poised to move to WiMAX. Photo / Paul Estcourt

Woosh Wireless is finally in the black after years of burning money establishing itself as a wireless telco operator.

Marketing manager Gerome Garthwaite admitted that a "relatively intense bonfire" had cut a swathe through its cash, but the company had arrested the burn through competitive deals for wholesale fixed-line broadband.

Woosh reported losses of $21 million for the year ended June 2008 - on a par with previous years.

Garthwaite said the competitive wholesale market, in which Vodafone and Orcon had put out wholesale offers on the back of local loop unbundling investment, meant better margins for broadband resellers.

The company announced two weeks ago it had signed a nationwide broadband deal with Telecom Wholesale.

Woosh has 28,000 customers on its wireless network and 3000 to 4000 on DSL, a legacy of its purchase of Quicksilver in 2006.

The first time Woosh recorded positive ebitda was last month and Garthwaite said it was likely to be the same this month.

"We've gone from every month wondering how we're going to pay the wages."

Garthwaite said a line of credit was available from cornerstone shareholders Kuwait Finance House.

The extra cash will be important as the company moves its wireless technology to WiMAX.

Garthwaite said Woosh "was in advanced discussions with a number of vendors" but would not be drawn on when a WiMAX network would go live.

The Woosh website gives late 2009 as a launch date.

Originally the company had planned to run a WiMAX trial, but Garthwaite said with 420 WiMAX networks in operation around the world Woosh didn't need to test the technology.

He said even the emergence of LTE technology had been factored in, saying it would be a simple process to upgrade from WiMAX.

But with Telecom and Vodafone spending large sums on high-speed 3G networks it was unlikely either would use LTE in the near future.

"We're aware of the challenges. We've thought about them and we have a plan," said Garthwaite.

The company had spent the past 18 months keeping a low profile and getting the house in order.

It's a period which has seen the departure of key staff including former chief executive Kevin Wiley, chief operating officer Kristin Dunne-Powell and chief technical officer Paul Kearney.

Woosh is advertising for a chief technical officer.

Company founder Rod Inglis is involved at an operational level with Garthwaite running the company on a day-to-day basis.

Garthwaite said the management structure was right for a company of its size in the telco sector.

Woosh has 90 full-time equivalent staff.

Bahrain-based Kuwait Finance House holds close to 50 per cent of the company, a shareholding that has increased over time thanks to cash injections and debt-to-equity arrangements.

Kuwait Finance House representatives hold two seats on the board. The remaining one is occupied by Inglis.

US-based Clarity Partners hold more than 20 per cent with a long tail of investors including Todd Capital, Sky TV founder Craig Heatley, Vodafone, ACC and assorted staff.