MOBI LIMITED Audio Webcast

MOBI LIMITED (MBI)

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MOBI LIMITED (MBI) Events

Company (Stock Code)	Date/Time	Event	Timezone: Australia/NSW
MOBI LIMITED (MBI) Strongest Performing IP Company	Tue, 22 Jul 2008 04:15PM	MBI - Smart Business eConference - Mr Michael Abela, Managing Director
MOBI LIMITED (MBI)	Fri, 7 Nov 2008 10:00AM	Annual General Meeting Webb Room, Hotel Charsfield, 478 St Kilda Road, Melbourne, VIC
MOBI LIMITED (MBI)	Fri, 29 Aug 2008	Full Year Results
MOBI LIMITED (MBI)	Thu, 28 Feb 2008 11:00PM	Interim Results
MOBI LIMITED (MBI)	Fri, 30 Nov 2007 10:00AM	Annual General Meeting Botanic Room at th Seasons (Botanic Gardens) Hotel, 348 St Kilda Road Melbourne VIC 3004
MOBI LIMITED (MBI)	Wed, 12 Sep 2007	EGM
MOBI LIMITED (MBI)	Fri, 31 Aug 2007	Full Year Results
MOBI LIMITED (MBI)	Tue, 27 Feb 2007 11:00PM	Interim Results
MOBI LIMITED (MBI)	Wed, 20 Dec 2006 09:00AM	Annual General Meeting Level 3, 95 Coventry Street South Melbourne VIC
MOBI LIMITED (MBI)	Fri, 6 Oct 2006 10:00AM	EGM Asia Pacific House, Boardroom, Level 1, 434 St Kilda Road Melbourne VIC 3004
MOBI LIMITED (MBI)	Wed, 13 Sep 2006	Full Year Results
MOBI LIMITED (MBI)	Wed, 15 Mar 2006 11:00PM	Interim Results
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MOBI LIMITED (MBI)

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PRESENTATION WITH MICHAEL ABELA, MANAGING DIRECTOR OF MOBI LIMITED (MBI)

“Strongest Performing IP Company”

http://www.brr.com.au/event/47973

 

MONDAY, JULY 21, 2008, 1:30 PM.

 

MBI Hello and welcome to the Boardroom Radio’s Smart Business Conference. My name is Michael Abela from Mobi Limited. I’m presenting today an

10 overview of the company, in particularly concentrating on the work we’re currently performing in the hosted IP telephony space. It’s been a difficult market for Mobi this year as it has for a lot of small cap companies, but it’s been a year that we’ve really resolved and increased our focus around the business and our efforts to achieve profitability. In that order, we’ve looked at

15 several areas including very large reductioning costs, focus on our core competency that is focusing on being the leading hosted IP telephony business in the country. The economy starts to tighten Mobi’s leadership in this position. We’ll hold that in very good stead as we move into on tighter times for all Australian companies.

20

The normal disclaimer is applied to this presentation in regards to public companies. Starting at the executive summary, Mobi has significantly strengthened its corporate structure in recent times. In the last 12 months, it’s reduced its convertible notes from $1.2 million down to $300,000 and that is

25 the only substantial debt within the company. In addition to that, we’ve significantly strengthened the governance of the board, revitalizing the board and adding a new chairman, Terry Wills Cooke, recently which was announced to the market. This brings a cool steady head to the board and increases the focus from an independent perspective. In addition to that,

30 we’ve continued to focus around the core competencies of the business.

 

We recently announced to the market that we divested one of our non-core entities, MobiData, that has had a two-fold positive effect on the company. Firstly, it reduced any burden that that entity had within the company and

35 secondly we still maintained an upside through this sale to a company called Conquest. We’re looking forward to potentially seeing future revenues come in through a revenue sharing which will last the next 30 months with that entity. More importantly, we’ve continued to focus around our hosted IP telephony space.

40

The core focus of that business and the reason for the focus around that business is it generates a strong annuity stream. We own and maintain all intellectual property around that product. It's in a growing sector of the market. It's one of the strongest performing IP companies in the country.

45 Surrounding that and encompassing that is a strong management team that we've continued to build up and strengthen over the last 12 months. Our corporate structure has strengthened as I’ve indicated in the executive summary. MBI, as our listed code, has a market cap of 7 million with 220 million shares on offer. We've had a quite a broader trading range over the last 12 months or so, which is not unlike a lot of small caps in the space.

 

Our focus obviously is to return shareholder value over time and we believe

5 that we have significant hidden value in our shares. Unfortunately, like many small caps, we had a small proportion of our shares which were tied up in Opus Prime. Luckily for the company, these shares were traded on the market very quickly, so it did not have any long-term effect other than the pricing effect which we're still recovering from as we speak. Importantly, we

10 have a very strong and supportive top ten shareholders and there’s very little movement within that. The company structure and positioning indicates the key focus of the company.

 

After the sale of our MobiData asset, we have three core operating entities

15 being AK Communications, Sholl Communications and OneNetwork. And as this slide indicates, we have a very broad offering from traditional telephony through to hosted IP telephony. On the traditional telephony space, we provide phone systems, landline and mobiles, cabling and our revenue is predominantly protracted through a service model.

20

The initial purchase of Sholl Communications was critical and a cornerstone investment for the company to bring us long-standing, credible, as well as a cash flow positive entity into the business. We’ve continued to strengthen that business over the past 12 months and in some ways revitalize it. We've

25 added to that, AK Communications, which gives us an operating entity up in Sydney as well. OneNetwork is our entry into the strong going IP telephony space. OneNetwork we would say is the leader in the hosted IP telephony space and provides hosted phone systems, IP carriage and data and as opposed to AK communication and Sholl which bring in service revenue,

30 OneNetwork brings in a strong annuity service revenue model. Our existing business maintains both traditional telephony and hosted IP telephony, with the future of the business longer term in our IP telephony space.

 

What are the environmental drivers in the hosted telephony as we move

35 forward into the next year to five years? There are two key drivers as we see them today, one being a set of business drivers and the other one being a set of technology drivers. Most businesses in Australia are currently facing, within the next 12 to 18 months, of slowing economy and certainly facing a tighter financial market whether that is a safe risk or real risk. Certainly, anybody

40 that is selling into the business space at the moment is going to have to face up to the fact that there is going to be tougher times ahead.

 

In addition to that from a technology perspective, we have a time like never before. We have technology that's providing more choice than we we’ve ever

45 seen before in the telecommunication space. With this increased choice, we have also had increased confusion. More technology turns in most businesses can handle, more requirements to service providers to provide that advise to provide the best solution possible for the companies in Australia. Combining these two things together, we have a very complicated pricing and very complicated packages for businesses to choose from to provide the best solutions possible.

 

So what are companies seeking in these tighter environmental times with

5 greater complexity than ever? There are six key things that we believe companies are seeking. Firstly, is greater control, greater control over their spend, greater control over their capital and greater control over their future ramp up of technology spending. They're seeking increased visibility. They want to control that spending. That spending needs to be controlled from their

10 general manager and (inaudible) (6:02) level down to the financial systems that manage their company.

 

Cost and technology scalability, whether it's scaling up or scaling down in the leaner times, companies are avoiding making one single investment that puts

15 them at risk into the future. Like all businesses, they want to maximize return on any investment they make. They want to future-proof their business, meaning they don't want to make any investment now that’s doing to be out date in 12 months’ time and these are all feeding through to what we believe are going to be critical in the next 12 to 18 months, is making their business

20 recession-proof.

 

How do these elements and how does environmental factors position Mobi well into the future? As I said, we have two forms of offering: a traditional telephony offering, meaning phone installations, phone systems and

25 traditional telephony products and our new hosted IP telephony products around our OneNetwork company and OneNetwork offering. So it’s worth spending a little bit of time talking about OneNetwork and why we think that holds some great potential for our company in the future.

 

30 One network is a hosted-internet telephony business. Now what that means is for any company seeking a telephone system, which is a key communications requirement for any company operating in Australia, rather than going and buying a traditional PABX and traditional capital to manage their phone systems, all that investment and all that phone system is actually

35 hosted remotely by OneNetwork. It’s a very compelling value proposition for business clients.

 

Firstly, there is no traditional upfront capital or hardware expenditure for clients. This can be a saving from tens to hundreds of thousands depending

40 on the size of the business. All phone system hardware is owned and hosted by OneNetwork, so your communication cost and your capital cost is taken off the balance sheet and it's just a month-by-month expenditure for the business. Importantly, any expenditure that the business makes needs to be best of breed. The benefit that OneNetwork has is because we’re building a

45 solution that can accommodate the needs of all businesses and is consistently being improved. All our customers are getting the best of breed solution.

 

Gone are the days where you have to invest in a PABX or a phone system that’s out of date the second that you buy it. One of the concerns in industry from times past has been whether IP or internet telephony has the appropriate quality to run on a business system. We’ve certainly addressed

5 that as a key requirement of our deliverables and unlike many companies including traditional companies, we actually provide various levels of guaranteed business quality and uptime on their phone systems and their data products. This comes together both in terms of cost and technology.

 

10 Overall, we provide a lower total cost of ownership compared to both traditional and other forms of IP telephony. For businesses, this means a saving of up to 60% on their voice and data charges. It is a total scalable solution for all clients. They can start off with five handsets or five users and work all the way up into the thousands and they only pay for what they are

15 using.

 

From an investment perspective or from a company perspective for OneNetwork, it delivers a very strong annuity model. OneNetwork generates over $120 per telephone connection or that’s per user connection every

20 month. So once we’ve sold it, those customers are generally on contracts from two to three years. The current network capacity of the network is 5,000 users, but the system is being developed to take many tens to hundreds of thousands of users with very limited network investment at all. The system is being developed over three years and again, we believe that it is best of

25 breed in its space.

 

But again, we come back to the challenges of an economy that seems to be slowing and business drivers for all businesses regardless of what the economy does in the next 18 months, which is very much looking at

30 increasing visibility of their cost, increasing feasibility of their communications and maximizing return on any investment they make in communications and telecommunications. For this reason, we’ve launched what we call OneNetwork Unlimited and it really is the first of its type in Australia for business. OneNetwork combines IP internet telephony, a complete hosted

35 phone system replacing the functionality and need for PABX. What this means is, per six monthly (inaudible) (10:09), our business customers receive unlimited calls to landlines, unlimited calls to mobiles, unlimited STD and national calls, free web hosting, unlimited internet usage, all their telephone equipment will receive a commercial grade Cisco handset as well as 24/7 365

40 days a year support. All of these are built in to a single cost per telephone.

 

It’s important to note that there are no installation or capital charges at all with OneNetwork Unlimited. The products are designed specifically for small to medium enterprises from 10 to 100 users. For these users specifically,

45 whether they are moving into a new office, whether they are new start up company or that they’re just looking to expand, OneNework Unlimited has all the benefits that are discussed during the environmental slide and the environmental drivers of business. The first time ever company that now is able to say “I have a particular number of users using our fixed line telephones. I know exactly what my monthly bills are going to be regardless of what my usage is. I have no up front charges to install those phones and if I have an increase in the number of employees and that’s the result of either an increase in the number of staff and the number of phones, all I need to do

5 is to pay per phone every month.” The conversion of that is if businesses is going to a restructure or refocus and there are less employees and there is a need for less to lessen the equipment, then we just take off those number of phones and the rental is reduced every month. We really believe this is a key driver of our business moving forward and it is an area we’re spending

10 particular focus on within Mobi as we move forth into this next financial year.

 

So in summary, over the past 12 months, the company has increased its focus on profitability. We’ve significantly reduced the cost base of the company and we’ve increased the governance around managing the

15 structural elements of the company. We have an experienced management and strengthened board in place. We have three performing assets in terms of our three subsidiaries being OneNetwork, Sholl Communications, and AK Communications. There is future value at to be realized from the sales of MobiData asset and there is no downside risk at all anymore. We have a

20 market offering that accommodates either a growing or slowing market and the key focus of the offerings whether it be through our AK or Sholl traditional telephony or whether it is our OneNetwork IP telephony is that we are positioning ourselves to be able to make businesses in Australia recession-ready and this is backed by strong cornerstone investors that are continuing

25 to invest and back the company as we move forward.

 

So from a corporate perspective, we believe that we’ve done the right things to ready ourselves for the next couple of years and to see significant growth within the company. From a technology perspective, we have the benefit of

30 picking up companies like OneNetwork that have had three to five years of investment in what is now a significant opportunity in the market in the hosted IP telephony space in an area over the market that we think has the potential to grow to be a market of the size of the billion dollars plus in the next 10 years and obviously we would like to maintain a strong position within that

35 very strong growing market.

 

I thank you for your time today and I am certainly available should there be any questions in the future regarding our company. Thank you.

 

 

INTERVIEW CONCLUDED

 

 

 

Contact brr@brr.com.au for more information

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