Struggling ISP SP Telemedia which operates Internet and telephone services in Australia under the Soul brand, has reported a net loss for the year to June 30 of $18.9 million. It was only 12 months ago after taking on bottom end ISP TPG whose services were popular with students that Soul were bragging as to how they were set to carve up the Australian broadband market.
The result compares with a profit last year of $5.96 million. Revenue rose five percent to $446.45 million. SPT says it lost $35 million on uncollectible revenues; previously capitalised but now written-off commissions; and costs associated with the acquisition of Internet services provider TPG. The one-off costs related principally to Soul’s consumer business.
Many customers were acquired through dealers who received high upfront commissions, resulting in cash outflows exceeding inflows. A $25 million non-cash writedown was also booked on assets and intangibles.
SP Telemedia’ subsidiary Soul Communications is one of the eight telecoms companies in the Terria consortium which is bidding for the Federal Government’s National Broadband Network project.