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Woosh sharpens its competitive edge

February 1, 2005

Woosh sharpens its competitive edge

Woosh Wireless has strengthened its executive management team and cut the cost of broadband to the price levels that have delivered faster uptake in overseas markets.

Chief Executive Bob Smith says this year will be dominated by market growth and new opportunities as the company begins to scale up its operations.

"We now have 10,000 customers, double that of six months ago, and expect to significantly grow that figure in the coming year, which will also see us launch voice services to supplement our fixed and portable broadband offerings."

Mr Smith says the company is in good shape in respect to its capital programme and investment plans.

"We have raised around $120 million to date and have strong cash reserves to fund our assault on New Zealand's dial-up Internet market."

He says the company has made good progress in expanding and upgrading its network and building its management team. It is now scaling up its customer numbers and competing more aggressively in the market.

New shareholders and strong international alliances had further strengthened the business.

Mr Smith says Woosh is very happy with its choice of TDD-CDMA technology at the core of its wireless network. It is now one of around 40 deployments or trials around the world. The technology is proving to have major advantages in the 3G market and for broadband in particular. The cost of components for this technology is falling as economies of scale improve, allowing the company to price its services very competitively against incumbent dial-up suppliers.

He says the company's new pricing plans reflect considerable research in New Zealand and abroad. Its successful December promotional offer, a crucial part in testing, saw its customer acquisition for the month rise by 75% over its previous best ever sales month.

With Woosh's new entry level broadband at $29.95 a month, the price jump between dial-up and Internet has been reduced to the kinds of levels that have seen broadband take off in markets like the United Kingdom and Australia.

"As well as price, we know that broadband penetration seems to have certain trigger points in the market, and that once a certain proportion of subscribers have it, uptake really takes off.

"We expect that trigger point to be reached this year in New Zealand, as it was in Australia last year."

Broadband penetration in New Zealand is the lowest in the OECD at around 6% to 8% compared to, for example, well over 30% in the UK.

Mr Smith says he believes this is attributable to the low price of dial-up in New Zealand relative to broadband - something Woosh is changing.

Woosh's new pricing plans means it will help drive broadband usage in New Zealand to its 'tipping point,' ensuring the company is ready to capitalise on the expected surge in broadband uptake when that occurs.

"As our coverage expands and with competitive pricing, portability and greater ease of use, we look forward to seriously driving broadband uptake in New Zealand."

Mr Smith says that as well as network expansion, the appointment of Richard Cane as Chief Operating Officer would enable the company to grow within an improved executive management structure.

"Richard joins Gary Neill, our Chief Financial Officer, Sandra Geange our General Manager Sales and Marketing, and Nick Clarke, General Manager Commercial and Legal in Woosh's executive team reporting to me."


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