4life has released its second quarterly results, but has been struggling to gain traction in the Australian market.
Key points:4life has seen a dramatic rise in its share of Australian broadband subscriptionsThe network has become the second biggest network in AustraliaThe company has had a number of issues with customer service, including a botched rollout of a new product, a customer service email and a dispute with a network supplierThe company’s shares have dropped 20 per cent since the first quarter of the yearAfter years of being the second largest network in the country, 4life announced it was cutting its workforce and shutting down.
At the time, the company said it would cut 2,500 jobs and would focus on building a new network.4life now says it is working on a turnaround plan, and has been in negotiations with a number in the broadband industry.
It is working with network operator Aussie Broadband to make the network available for purchase, the Australian Communications and Media Authority said.
The company is now also considering options for its existing network, including moving it to a new, smaller location, as well as expanding its reach and becoming a “distributed” network.
However, 4miles says it still needs to find new investment to make its business viable, and that there is an “extremely limited amount of cash on hand” to make that happen.”4miles is working towards establishing a new revenue stream in the US and Europe that will allow us to support our operations and continue to grow,” the company’s head of corporate communications, Dan O’Sullivan, said in a statement.
“We have recently engaged in a strategic dialogue with a third party to explore potential business opportunities in Europe, and we are currently in discussions with multiple potential new investors.”
In its first quarter, the network said its total revenue was $4.6 million.
However the company had been struggling in Australia, with sales falling 5 per cent to $1.8 million in the quarter.
In Australia, the service is only available in some states and territory, but it has been successful in New South Wales, with more than 85 per cent of its customers using the network.
The network was also experiencing a “significant” number of customer complaints in the first three months of this year, with the company receiving 2,400 emails and complaints from the end of February.4males was a network service provider for the likes of Apple, Netflix, Amazon, Apple TV, Google, Facebook and Microsoft before it was sold to CNA last year.
Mr O’Sullivans statement says that while 4males is a “network service provider”, it is “not a network”, as the network does not operate a physical network.
“Its business model relies on a series of events that occur in the background, some of which are outside of 4mals management control,” he said.
“The network is not a network, but rather is a distributed network, and a network provider is a network company.”
So whilst it has the power to make money in the form of subscription revenue and advertising, it is not the network provider that makes money for the network.”4mils network was the second-largest in the world, behind only Apple, but was not able to break into the Australian network market.
The NBN is currently the country’s largest broadband network, with 665,000 premises and almost 60,000 households connected to it.
A spokesman for CNA said it has no plans to sell 4mils, which is currently owned by a subsidiary of a different company.4Life’s financial results will be published in the company website on Friday.
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