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MNF - MNF Group

iimamit

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My Net Fone Limited (listed on the Australian Stock Exchange in May 2006, stock code MNF), is Australia’s leading broadband VoIP phone service provider.

The Australian telecom industry is very competitive and dynamic. Mynetfone’s competitor and market leader ENGIN’s cash burn has continued and the company announced more equity raising recently.

On the contrary, MyNetFone management has kept a tight control over costs and increased revenue quarter on quarter resulting in positive Cash Flow Positive in December 2007 Quarter. Revenue growth is evident with an approx 20% increase quarter on quarter.

The company has close to 48,000 paying customers and continues the strong growth in subscriber numbers over the past quarters.

My Net Fone Limited has been featured in “The Emerging Companies Review 2007” (Aegis Bluebooks Research) published by Aegis Independent Equities Research.
https://www.mynetfone.com.au/media/investor/Miscellaneous/MNF.PDF

I hold a position in this stock. I believe the prospects of the company are bright going forward. Please contribute to the discussion with your thoughts/views on this company/industry/sector etc.
 

prawn_86

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Re: MNF - My Net Fone

I actually use voip, but my provider is Evoip.

There are a multitude of VOIP co's out there and I think the industry needs a lot of consolidation and marketing before anything truely moves forward.
 
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Re: MNF - My Net Fone

Can't comment on the investment, but MyNetFone is my VOIP provider, and once my credit is used, I am swapping to another company which received Money Magazines best VOIP provider (for both home and business). Can't remember the name, but they are VOIPing calls to mobiles, whereas MNF you pay on time still. Unless MNF change (which I enquired and they said no current plans only about 1 month ago) then they may lose some custom (like me who is about to leave them). This is for home use by the way. Just letting you know how one customer is feeling about them.
 

iimamit

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Re: MNF - My Net Fone

Hi Grace,

Thanks for the response.

I did not get the "whereas MNF you pay on time still." part.

Could you elaborate?

Regards,
iimamit
 
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Re: MNF - My Net Fone

While I definitely agree with the potential of VOIP and the 'value add' for the customer (with me being a MyNetPhone customer)......and it does appear MNF is doing better than its competitors, I personally can't justify investment or the valuation of companies in situations like this.....

The turn to positive cashflow is of course significant but it would appear as if they will be issuing much capital in the future to fund growth........with the complete uncertainty over how much capital will be needed, I can't value today's shares on any basis...

Further the killer is the 35 million options that have been issued around the current price (with only 50 million shares on issue)......that many options will cap ordinary investor returns for years to come.......and reflects a company with very much the wrong priorities.......its unlikely the punters ever get long term appreciation from companies which operate on this basis......still, hope I'm wrong
 
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Re: MNF - My Net Fone

I use engin, and have for 2 years or so and am very happy
Cant speak for MNF, I bought engin shares at 18c and it went to 50c 2 months later, sold mid 30's and is now sitting around 7c

Hope mnf does better for you, and perhaps they can have better profitability than engin who have always struggled with this, as their customer base increased.
 
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Re: MNF - My Net Fone

I have experience working in the VoIP industry so here is my view:

Although there are many players in the VoIP market right now, there is still a lot of money to be made charging 10c for a phone call because the overheads are so low and the customer base is very easily scaled once the servers are in place.

That said, MyNetFone has overtaken Engin in the largest customer base early last year. However, with any VoIP service, it is hard to tell how many of those are inactive customers on $0 monthly fee plans so don't take the figures too literally. Or they just subscribe and use up the free credit and leave the account inactive. Also, people may subscribe to multiple VoIP providers.

The main threat facing MyNetFone right now is competition from ISPs that bundle VoIP with their service. The big ISPs like iiNet and TPG have been doing it for a year now but they still need to get their act together to be more competitive in the VoIP market. However, if naked ADSL is successful (ADSL that does not require a landline) and their VoIP packages are more attractive, there will be not much advantage to getting a 3rd party VoIP provider like MNF.

What MNF is doing is having partnerships with other ISPs to refer their customers to MNF where they have a lot of success with the rural market. They also have deals with most VoIP hardware companies to bundle their free credit with the retail hardware.


edit: It is best to read on the whirlpool forums to find out about the competition in the market.
 
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Re: MNF - My Net Fone

Hi Grace,

Thanks for the response.

I did not get the "whereas MNF you pay on time still." part.

Could you elaborate?

Regards,
iimamit
Calls to mobile phones using MNF are per minute, whereas, under the other plan I was looking at, calls to mobiles are UNTIMED. The only big hit on my MNF bill at present are calls to mobiles. This other plan (and when I find it, I'll post) all mobiles are included. Untimed, just reasonable use, which is reasonable in terms of home use. This other plan was the first to include mobiles with "unlimited" talk time (reasonable use test)......others will have to follow I'm sure.
 
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Re: MNF - My Net Fone

Can't comment on the investment, but MyNetFone is my VOIP provider, and once my credit is used, I am swapping to another company which received Money Magazines best VOIP provider (for both home and business). Can't remember the name, but they are VOIPing calls to mobiles, whereas MNF you pay on time still. Unless MNF change (which I enquired and they said no current plans only about 1 month ago) then they may lose some custom (like me who is about to leave them). This is for home use by the way. Just letting you know how one customer is feeling about them.
a search indicates the co that got all the accolades was Gotalk - haven't researched them yet but will have a look later
 

iimamit

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Re: MNF - My Net Fone

While I definitely agree with the potential of VOIP and the 'value add' for the customer (with me being a MyNetPhone customer)......and it does appear MNF is doing better than its competitors, I personally can't justify investment or the valuation of companies in situations like this.....

The turn to positive cashflow is of course significant but it would appear as if they will be issuing much capital in the future to fund growth... with the complete uncertainty over how much capital will be needed, I can't value today's shares on any basis...

Further the killer is the 35 million options that have been issued around the current price (with only 50 million shares on issue)......that many options will cap ordinary investor returns for years to come.......and reflects a company with very much the wrong priorities.......its unlikely the punters ever get long term appreciation from companies which operate on this basis......still, hope I'm wrong
In an intensely competitive industry, the low cost service provider has a competitive advantage. MNF appears to be one of the low cost players in the industry and keeps costs in tight control. Management quality is commendable.

I agree on the number of options issued by the company is high but even with a the diluted equity of say 81 Million (4 million lapsed recently), the company demonstrates strong growth. CASH IS KING in any business and the Revenues for the past seven quarters (all figures in $ '000) is 621, 733, 900, 1110, 1225, 1511 and 1808 (dec 2007). Also do note that in this business, most of the calls are prepaid and hence negative working capital which is excellent given that there is no capital constraints due to working capital requirements.

The cost structure in the VOIP industry is such that there is very less variable cost. The Gross profit in this business is high and the overhead are stable with very slight increase in costs on increased revenue. Given that the company is at break even and assuming that it increases revenue with control over costs in the coming quarters, most of the increased revenue should get added to the bottomline.
 
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Re: MNF - My Net Fone

I hear what you are saying....no question VOIP is great and MNF is a very good provider...but my point is that we are just picking figures out of the air here....without a sound balance sheet and history of profitability, I have no idea what a share is worth if there is 81 million of them....plus I don't even want to think about the pressure the major Telcos may exert....hehe currently TLS acts as if VOIP does not exist for residendial customers..........unless one's a deep insider, this type of buy is pretty much speculation....love my net phone though
 

iimamit

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Re: MNF - My Net Fone

I hear what you are saying....no question VOIP is great and MNF is a very good provider...but my point is that we are just picking figures out of the air here....without a sound balance sheet and history of profitability, I have no idea what a share is worth if there is 81 million of them....plus I don't even want to think about the pressure the major Telcos may exert....hehe currently TLS acts as if VOIP does not exist for residendial customers..........unless one's a deep insider, this type of buy is pretty much speculation....love my net phone though
I agree with your view on picking up numbers without a basis. However, I am of the opinion that a startup turnaround company has a good chance of appreciation if a turn around can be spotted earlier in the stage. In this regard, MNF turnover has increased quarter on quarter for the past few quarters as per their ASX announcements which is encouraging.

On your view on a major telco exerting pressure, I believe the pressure is the other way around. Small niche players exert pressure on the bread and butter business of landlines. If telstra or any other major exerts pressure by lowering prices for landline, I believe a large amount of their sales turnover would drop immediately and no reason to believe that that the total number of landlines in Australia would increase (land line market of australia is nearly saturated). It is players like MNF and other VOIP providers which are a threat to major Telcos resulting in near gloomy outlook for telstra.

As you rightly pointed out a bundled naked ADSL offer is a competitive threat to the business model of MNF but then the cost structure for such companies would be different with higher costs associated with providing the ADSL service and lower margins than pureplay VOIP service providers. Hence I believe there would be limits to the price cuts they can offer. However this argument is debatable and only time will tell how things unfold. Meanwhile I am continue to try and keep updated with the latest.
 

iimamit

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Re: MNF - My Net Fone

I agree with your view on picking up numbers without a basis. However, I am of the opinion that a startup turnaround company has a good chance of appreciation if a turn around can be spotted earlier in the stage. In this regard, MNF turnover has increased quarter on quarter for the past few quarters as per their ASX announcements which is encouraging.

On your view on a major telco exerting pressure, I believe the pressure is the other way around. Small niche players exert pressure on the bread and butter business of landlines. If telstra or any other major exerts pressure by lowering prices for landline, I believe a large amount of their sales turnover would drop immediately and no reason to believe that that the total number of landlines in Australia would increase (land line market of australia is nearly saturated). It is players like MNF and other VOIP providers which are a threat to major Telcos resulting in near gloomy outlook for telstra.

As you rightly pointed out a bundled naked ADSL offer is a competitive threat to the business model of MNF but then the cost structure for such companies would be different with higher costs associated with providing the ADSL service and lower margins than pureplay VOIP service providers. Hence I believe there would be limits to the price cuts they can offer. However this argument is debatable and only time will tell how things unfold. Meanwhile I am continue to try and keep updated with the latest.

Annual Results for the company announced.. excerps from the annual report:

The gross revenue and gross profit for the year were over $6.8M 2007:$3.3M) and $2M (2007: $0.87M), an increase of 107.8% and 132.3% respectively. The revenue growth is due to the continuing increase in subscriber growth and call usage by customers. The deferred revenue for the year increased to $0.73M as compared with $0.44M in 2007 – an increase of 65.9%. The deferred revenue is the call credits deposited by the customers in their accounts for making future phone calls and is non-refundable. The company reached cash flow positive in the second half of the year and made a net trading loss of $1.9M (2007:$3.3M) for the year, significantly
reducing previous year’s loss.
It is important to point out that the significant growth the company experienced in the year includes strong contributions from the SMB (small & medium business) sector as well as from the traditional residential users.
These two segments: residential and enterprise will form the platform of growth and expansion for the company in future years. Under the current tight economic climate, business enterprises are very conscious of cost control. My Net Fone’s services are ideal for SMB’s translating cost savings and efficiency gains to their bottom lines. The technology shift to IP (Internet Protocol) also facilitates the transition of moving away from out-dated
equipment to MyNetFone’s new generation innovative services.

Going Forward:

While we expect the MyNetFone business to continue to grow and we are very excited by the opportunities
unfolding with the continuing up-take of IP PBX’s and our own Virtual PBX by our customers in the enterprise segment. This industry wide shift to IP technology has caused all service providers to compete in a new territory that few has had any previous experience before. My Net Fone will seize this window of opportunity to establish itself as a potent force in the Australian market.

Another area that we look forward to growing is with the launch of naked DSL service in the new financial year. This broadband data service, together with MyNetFone’s VoIP, will be offered as a convergent, bundled offering. One of the key advantages of this offering is that customers will no longer need to subscribe and pay a monthly line rental fee to the incumbent provider, making the value proposition for MyNetFone bundled services even more compelling than ever before.
 

iimamit

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Re: MNF - My Net Fone

Annual Results for the company announced.. excerps from the annual report:

The gross revenue and gross profit for the year were over $6.8M 2007:$3.3M) and $2M (2007: $0.87M), an increase of 107.8% and 132.3% respectively. The revenue growth is due to the continuing increase in subscriber growth and call usage by customers. The deferred revenue for the year increased to $0.73M as compared with $0.44M in 2007 – an increase of 65.9%. The deferred revenue is the call credits deposited by the customers in their accounts for making future phone calls and is non-refundable. The company reached cash flow positive in the second half of the year and made a net trading loss of $1.9M (2007:$3.3M) for the year, significantly
reducing previous year’s loss.
It is important to point out that the significant growth the company experienced in the year includes strong contributions from the SMB (small & medium business) sector as well as from the traditional residential users.
These two segments: residential and enterprise will form the platform of growth and expansion for the company in future years. Under the current tight economic climate, business enterprises are very conscious of cost control. My Net Fone’s services are ideal for SMB’s translating cost savings and efficiency gains to their bottom lines. The technology shift to IP (Internet Protocol) also facilitates the transition of moving away from out-dated
equipment to MyNetFone’s new generation innovative services.

Going Forward:

While we expect the MyNetFone business to continue to grow and we are very excited by the opportunities
unfolding with the continuing up-take of IP PBX’s and our own Virtual PBX by our customers in the enterprise segment. This industry wide shift to IP technology has caused all service providers to compete in a new territory that few has had any previous experience before. My Net Fone will seize this window of opportunity to establish itself as a potent force in the Australian market.

Another area that we look forward to growing is with the launch of naked DSL service in the new financial year. This broadband data service, together with MyNetFone’s VoIP, will be offered as a convergent, bundled offering. One of the key advantages of this offering is that customers will no longer need to subscribe and pay a monthly line rental fee to the incumbent provider, making the value proposition for MyNetFone bundled services even more compelling than ever before.

_______________________________________________________

The company is cash positive and expects to be EBITDA positive this financial year. Company's business model is such that it would grow even more in tough economical conditions since it helps reduce costs for households and businesses. Nil debt is a good feature to have on the balance sheet given the times. The cash position is good with positive cashflow and no need to raise more cash. I believe this company is a great hedge against the overall economic deterioration and a good investment given the times and will show growth in tough economic conditions with significant upside.

Overall I still believe this is a great and promising small-cap stock. Happy Investing if you find this a good pick given the overall state of the market ... I already own a few shares ...
 

iimamit

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Re: MNF - My Net Fone

MNF: from Smart Company website with projections as for the financial year ending June 2009.

http://www.smartcompany.com.au/The-2008-SmartCompany-Awards/My-Net-Fone-Australia.html


My Net Fone Australia
SmartCompany50 rank: 5
Revenue: $6.85 million
Growth: 106.92%
Founders: Andy Fung, 57; Rene Sugo, 36
Based: New South Wales
Employees: 42
Industry: Communications
Website: www.mynetfone.com.au

Convincing people that voice over internet (VoIP) is a viable and long term service proposition was the big challenge that faced founders Andy Fung (right) and Rene Sugo (below) when they launched My Net Fone in 2004.
“We started the business because we recognised the huge potential of telecommunications business and the shifting of technology to VoIP. VoIP, broadband and IP (that is, internet) applications are the future of communications and multi-media,” Fung says. “We learned that the business must be creditable and needs to build a track record; that you ‘do what you said you'd do’.”

It hasn’t been easy. While some people love VoIP, others find it complicated and unreliable. “Building a track record is a long term thing – day in and day out,” Fung says. “It's not a flash in the pan, here today and gone tomorrow.”
The company did an IPO in May 2006 and is now listed on the ASX. It now has revenue of $6.85 million, up from $3.28 million in 2006-07. Fung says the goal is to become profitable, to reach $15 million turnover by June 2009 and to have 100,000 paying customers (up from 60,000 now).

“We have a board of experienced directors and we (the two founders) have had previous start-up experience with another company, Symbio Networks, which is still operating. Experience counts a lot, especially when you're moving in uncharted territory,” Fung says.

The company’s online strategy has been crucial to its success with more than 80% revenue coming from the web, Fung says. “We do e-marketing and e-commerce as well as providing self-support, top-up and provisioning facilities to our customers on-line. Our website is more than just providing information. It integrates closely to our marketing and e-commerce strategy and provides a full life-cycle of support and customer service to our customers.”

He says customers return and visit the website frequently to top-up their account, view their call history or change their profile detail. “We constantly interact and engage with our customers. We believe our website is an important tool for us to build brand recognition, loyalty and on-going relationships with our customers.”

He says the online strategy has helped reduce and control costs and savings have been passed on to customers in the form of cheaper call rates and better value. “We target consumers and enterprise users who are comfortable with broadband, increasingly running their daily business online via the web. We think of ourselves as a new generation communications provider in the era of internet IP,” he says.

Fung says the telecommunications industry is undergoing a fundamental change to IP technology and is converging with the IT industry. “Everything will be IP – voice, data, mobile and TV. This wholesale change is throwing up challenges as well as opportunities,” he says.

“The company’s next big move is to provide ADSL2+ broadband service in addition to VoIP. We'll then evolve tobecome a convergent provider of voice and data,” he says.
 

iimamit

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Re: MNF - My Net Fone

_______________________________________________________

The company is cash positive and expects to be EBITDA positive this financial year. Company's business model is such that it would grow even more in tough economical conditions since it helps reduce costs for households and businesses. Nil debt is a good feature to have on the balance sheet given the times. The cash position is good with positive cashflow and no need to raise more cash. I believe this company is a great hedge against the overall economic deterioration and a good investment given the times and will show growth in tough economic conditions with significant upside.

Overall I still believe this is a great and promising small-cap stock. Happy Investing if you find this a good pick given the overall state of the market ... I already own a few shares ...
EBITDA positive in the half year ended December 2008. Amazing achievement given the current market condition where making a profit is becoming an unachievable feat. MNF has achieve a turnaround in this environment.

Infact, MNF business model is based on providing value to the customer and hence it is no surprise that the company will do well in times of slowdown since companies and individuals look at their costs closely and look for value in the products and services they purchase.:)
 
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Re: MNF - My Net Fone

Hi,

Old thread I know... but i am seriously considering buying some MNF.

There's almost no information available from analysts in the public domain so I find myself trawling the forums for insight.

MNF seems to have continued to grow faster than the market and remains the leading Voip provider (with a number of other business off shoots such as ADSL). Their sales and profits have been growing above 20% - record half yearly profit this last half.

I got a little concerned about the 30 million outstanding options but I checked it out and they seem to have expired and there have been no more issued.

Just wondering if there's anyone else out there who's been watching the stock lately?
 

zac

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Re: MNF - My Net Fone

Hi,

Old thread I know... but i am seriously considering buying some MNF.

There's almost no information available from analysts in the public domain so I find myself trawling the forums for insight.

MNF seems to have continued to grow faster than the market and remains the leading Voip provider (with a number of other business off shoots such as ADSL). Their sales and profits have been growing above 20% - record half yearly profit this last half.

I got a little concerned about the 30 million outstanding options but I checked it out and they seem to have expired and there have been no more issued.

Just wondering if there's anyone else out there who's been watching the stock lately?
Ive heard the name MNF raised before but I was just going through some real small caps and came across MNF.
Anyone else got much comment on it.
Seems like the business is only getting better.
 
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Re: MNF - My Net Fone

Ive heard the name MNF raised before but I was just going through some real small caps and came across MNF.
Anyone else got much comment on it.
Seems like the business is only getting better.
I'm very glad i actually followed my instinct and bought MNF when i did. It was a long and painful wait, dropped 30% but it paid great dividends and now I've exited with 50% capital gain as well.
 
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Re: MNF - My Net Fone

My Net Fone Limited (listed on the Australian Stock Exchange in May 2006, stock code MNF), is Australia’s leading broadband VoIP phone service provider.

The Australian telecom industry is very competitive and dynamic. Mynetfone’s competitor and market leader ENGIN’s cash burn has continued and the company announced more equity raising recently.

On the contrary, MyNetFone management has kept a tight control over costs and increased revenue quarter on quarter resulting in positive Cash Flow Positive in December 2007 Quarter. Revenue growth is evident with an approx 20% increase quarter on quarter.

The company has close to 48,000 paying customers and continues the strong growth in subscriber numbers over the past quarters.

My Net Fone Limited has been featured in “The Emerging Companies Review 2007” (Aegis Bluebooks Research) published by Aegis Independent Equities Research.
https://www.mynetfone.com.au/media/investor/Miscellaneous/MNF.PDF

I hold a position in this stock. I believe the prospects of the company are bright going forward. Please contribute to the discussion with your thoughts/views on this company/industry/sector etc.
?

Are you still holding MNF iimamit?
 
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