A pretty regular query I receive is when will Westnet release a Voice Over IP (VOIP) product. Westnet has been looking at VOIP for quite a long time now and actually conducted a two month staff trial way back in late 2005. We have no question that the technology works but the hurdle we struggle to overcome every time we re-evaluate launching a VOIP product is why put our energy and development resources into a product that the prospects of breaking even on look pretty grim. Our core business is providing excellent products with excellent customer service and any product line we offer that risks making a loss puts that core business at jeopardy. We intend to be here for many more decades providing quality products and excellent customer service and this must remain in the forefront of our minds at all times.

Engin is a publicly listed company which claims a 44% share of the VOIP market. Engin announced recently to the ASX that they enjoyed a very impressive 173% revenue growth and 255% margin growth in the 6 months to December 2006. Unfortunately though this resulted in a net loss after tax of $4.5 million from revenue of $8.3 million. This loss was actually up from a net loss after tax of $3.7 million for the corresponding period in 2005. Engin is only an example but does demonstrate that VOIP is not an easy game to make a dollar in.

To cut a long story short, we would like to offer a VOIP service but will not offer one unless we can make it at least a break even proposition. I know I don’t want to see our broadband prices increase again and I suspect nearly 200,000 other members are with me on that. VOIP is scheduled to be reviewed again in the middle of 2007. Hopefully the numbers do look different but until they do you won’t see Westnet risking its core business on VOIP.