ENG - Engin Limited

[sandik17]

No, I'm not in the 'industry' of voip...but I do use it. And I am knowing more and more people who are. VoIP helps make Broadband affordable, and Engin is the company who is advertising, and making it very easily accessible to the 'average joe's' out there, who don't have the time to set up an intricate voip system with perhaps more technical gear or cheaper deals.
They have had a few teething problems as the company has grown at such an enormous rate (eg customer support etc), but are aware of these issues and are working to and have resolved them.
Watch this space....

 

[pch]

Without getting into complex details, here is one problem they cannot really get around..

Residential grade broadband is massively oversubscribed by ISP's. That is, if an ISP has 100000 customers at 1.5mbit is their upfeed bandwidth 100,000 * 1.5mbit? Hell no.. in fact its probably oversubscribed by a factor of 20-40 to 1.

That means the connection your *ISP* has to the internet is nowhere near the capacity to handle all users at once.

Thus at peak times, even though you have a fast connection, you will often not get the full bandwidth your ADSL allows. Residental DSL is so low margin. To give you an idea, a 1 hour tech support call would wipe out 3-5 months of margin for that customer. Hence why ISP's will always finely balance how much bandwidth they share between all the residential customers to keep costs down. (And with Telstra abusing their position to prop up their ailing margins, its likely to get worse).

If you ask an ISP how much a business grade DSL service costs (with bandwidth guarantees) the price goes up a lot.

Most of the time you don't really know the level of congestion in an ISP network. Most ISP traffic is the downloading of peer to peer traffic and you have to wait for that. Web pages are also non delay sensitive.

But with voice, you need instant response.

Unless the VOIP provider is also the ISP, and they control the traffic from your house to the point where they connect you to the telephone networks, how can they prioritise voice traffic over the other crap? They can't - because they do not own the network and thus have *no* control over how the ISP's treat that voice traffic. Those same ISP's compete with them, and do you think for 1 minute they will co-operate in this?

So this is where my skepticism lies.. and I would bet on companies that also own the network infrastructure because they are likely to be able to offer a more stable customer experience. This is because they can tailor their networks to ensure that voice traffic always gets priority over other forms of internal traffic.

Anyway thats just my take, and like I said I don't hold the stock so I have no interest either way.. Its about the only industry where I have some degreee of knowledge

 

[shy]

I don’t own the stock but I am using the engine box. I have bought it for the international calls. I think that is where it fits best. There are two issues that I have with it. One as pch said, it does have problems during peak hours. As much as it sounds funny it works great for international call not so much for local. This is because (IMO) local calls are made at day time and at least my international calls are made early morning or late at night due to the time difference. And those are the off peak hours. The other issue is that you still need to have a normal phone line for the ADSL. If and when the legislation will change and Telstra, or anybody else, will not charge a bundle for the ULL it might be more attractive. Cable users do not need to have a phone line to have broadband but for now ADSL is more popular since everybody has a phone line.

As for the stock. Don’t forget that in IT term this is still a “startup” company. If they do succeed you will see a lot of competition coming from all sorts of directions.
At can be the network providers the ISP and who knows, maybe Microsoft will decide to go into it and then ENG does not have much of a chance.

Just imho.

 

[IGO4IT]

As for the stock. Don’t forget that in IT term this is still a “startup” company. If they do succeed you will see a lot of competition coming from all sorts of directions.
At can be the network providers the ISP and who knows, maybe Microsoft will decide to go into it and then ENG does not have much of a chance.

Just imho.

Hi Shy,

I had the same idea, but with further reasearch, I realised that by the time there will be another competitor to eat from same pie, economies of scale will work for ENG's benefit.

the TELCO industry is huge & very popular & commerical. which in my idea even that there will be other competitors that can do better prices & better technology, ENG will then still be able to compete "head to head" with the big TELCO companies because of the market share it will hold at the time. That by itself is an increase in value for ENG - stepping our of a small player to a big player.

Also, in my rules book, I put watching technology stocks very close as rule #1, the market is constantly growing, updating & very rapidly as well. so if any change to market on long run imo it won't happen overnight.

so if competition appears, ENG will compete on same level of big companies & that will make it a big company & will attract more customers regardless of the quality of the product they're offering just because people know that they're big & will at least try to compare their offers with other giant competitors. same example are current small ISPs who for no reason still growing while optus & Telstra could in many cases provide cheaper options.

imo, this stock should be safe for at least 2-3 years without any dramatic competition fears to arise.

that my

 

[sandik17]

Hi Shy,

I had the same idea, but with further reasearch, I realised that by the time there will be another competitor to eat from same pie, economies of scale will work for ENG's benefit.

the TELCO industry is huge & very popular & commerical. which in my idea even that there will be other competitors that can do better prices & better technology, ENG will then still be able to compete "head to head" with the big TELCO companies because of the market share it will hold at the time. That by itself is an increase in value for ENG - stepping our of a small player to a big player.

Also, in my rules book, I put watching technology stocks very close as rule #1, the market is constantly growing, updating & very rapidly as well. so if any change to market on long run imo it won't happen overnight.

so if competition appears, ENG will compete on same level of big companies & that will make it a big company & will attract more customers regardless of the quality of the product they're offering just because people know that they're big & will at least try to compare their offers with other giant competitors. same example are current small ISPs who for no reason still growing while optus & Telstra could in many cases provide cheaper options.

imo, this stock should be safe for at least 2-3 years without any dramatic competition fears to arise.

that my

Love ya IGO$IT....couldn't have said it better myself....Love your 2 cents! We're in for a big week, and few months I rekon!

 

[Duckman#72]

Hi Shy,

I had the same idea, but with further reasearch, I realised that by the time there will be another competitor to eat from same pie, economies of scale will work for ENG's benefit.

the TELCO industry is huge & very popular & commerical. which in my idea even that there will be other competitors that can do better prices & better technology, ENG will then still be able to compete "head to head" with the big TELCO companies because of the market share it will hold at the time. That by itself is an increase in value for ENG - stepping our of a small player to a big player.

Also, in my rules book, I put watching technology stocks very close as rule #1, the market is constantly growing, updating & very rapidly as well. so if any change to market on long run imo it won't happen overnight.

so if competition appears, ENG will compete on same level of big companies & that will make it a big company & will attract more customers regardless of the quality of the product they're offering just because people know that they're big & will at least try to compare their offers with other giant competitors. same example are current small ISPs who for no reason still growing while optus & Telstra could in many cases provide cheaper options.

imo, this stock should be safe for at least 2-3 years without any dramatic competition fears to arise.

that my

Hello Sandik

While your exerberance towards this stock is admirable I must agree with comments made by IGO4IT.

ENG is a very small player in a very big market. Sure ENG is experiencing double digit subscriber growth each quarter but.......they need to as the margins in the telco industry are absolutely miniscule. Don't get too carried away with rocketing subscriber numbers as to my knowledge they haven't looked like turning a profit yet.

Also, at the end of the day what exactly does ENG own. A subscriber base? That's it. Once the big boys get serious about taking the market - Telstra, Optus and the like could well crush ENG. Why haven't they, you ask? Because they are too busy protecting their current customer base.

You ain't going to survive in this industry without volume, and I admit they are obtaining that at present but the playing field can change very quickly. While ENG is currently at the forefront of attracting new users of VOIP technology, I would suggest that not everyone is as loyal as Sandik.

Some brandings are important for the majority of consumer goods such as vehicles. food & beverages and clothes - I would be suggesting that the majority of people would swap from ENG to NEW COMPANY LTD without hestitation if it meant an additional savings per month.

If you go to the ENG website the primary selling point is cost savings - and the problem with attracting customers on that basis is that they will be the ones leaving you when a better deal arrives.

I look forward to seeing the report out next week Sandik and hope that its positive news but don't let the share price get ahead of it's fundamentals.

I agree with IGO4IT in that, in the short term ENG may continue its strong growth but I've serious concerns for its longevity. By all means - stay on the phone as the price rises but just know when to hang up.

Best Wishes
Duckman

 

[IGO4IT]

Hello Sandik


If you go to the ENG website the primary selling point is cost savings - and the problem with attracting customers on that basis is that they will be the ones leaving you when a better deal arrives.


Best Wishes
Duckman

Hi Duckman,

I agree that ENG current strategy is to attract those who are looking to save, which is bad as there will be no loyalty when a rival comes along with more savings to offer.

Lets look at it subjectively, the whole Telco business is about savings. since early 1970s the quality of phone call is practically the same & all what you can compete with in Telco market is how much less can consumers pay for the same exact phone call.

so regardless wether its IP or this new invention to make phone calls thru your hand watch, the average consumer find no fashion, no trend & no extra features in their "HOME" lines that technology can offer, the average consumer at home is looking for saving because a phone call is a phone call, if you pay less for it then good on you, if you pay more then you need to switch to someone that can give the same exact thing but cheaper!

so ENG is not offering anything else other savings because industry doesn't have anything else to offer.

 

[IGO4IT]

Also guys don't forget, next generation communications of VIDEO CONFERENCING is a lot cheaper thru VOIP than phone lines.

Thru IP based communication, its just bandwidth that you're using with a standard hardware to buy at home or office, while if using normal phone lines I think you need to change underground cables to be compatible to this technology, of course even if that will happen, normal phone line infrastructure costs to make it compatible will be too expensive & then we go back to square 1 that it has to happen on IP based communication.

so even out of a standard phone line to a video conferencing, it HAS to be IP based & whoever has the "know how" & the size at that time may lead the market.

 

[sandik17]

Hello Sandik


to my knowledge they haven't looked like turning a profit yet.


If you go to the ENG website the primary selling point is cost savings - and the problem with attracting customers on that basis is that they will be the ones leaving you when a better deal arrives.

I look forward to seeing the report out next week Sandik and hope that its positive news but don't let the share price get ahead of it's fundamentals.

Duckman,
Word is that there is going to be news of profit, if not this announcement, then next...which as you know can only lead to bigger and better things for the company....

As for people 'jumping ship' with a better/cheaper offer...many of the eng 'customers' are actually businesses, and I don't believe many of those will be keen to change their whole phone setup to save a couple of dollars a month??
Keeping along those 'jumping ship' lines, you forget that it is also ease of use that is assisting Eng. People like 'mum and dad' who are not terribly computer literate can install and use Engin.

I know it's hard to find loyalty such as mine in this day and age....but one can't argue with a good thing (and for me a 9c share to 25c in 3 months is pretty darn good!) Enjoy 'watching' the ride.....you could've been on it too!

 

[Duckman#72]

Duckman,
Word is that there is going to be news of profit, if not this announcement, then next...which as you know can only lead to bigger and better things for the company....

I know it's hard to find loyalty such as mine in this day and age....but one can't argue with a good thing (and for me a 9c share to 25c in 3 months is pretty darn good!) Enjoy 'watching' the ride.....you could've been on it too!

Hi Sandik

Thankyou for your views and prompt reply.

I love that phrase......"word is".

It can start so many sentences; "word is Santa will visit tonight", "word is Melb horse 6 race 6 has been set for this race", "word is we're breakin out tonight boys". Regardless of the context, it implies the same thing - it brings with it hope. And I think that is what is driving this stock more than anything else - hope. I "hope" for your sake I'm proven wrong.

You said that one of the attractions of ENG and VOIP was ease of use and implementation, then you mentioned that businesses wouldn't go through the hassle of changing companies for a few dollars. Well which one is it - "a hassle" to get connected or "quick and easy" to get connected? You will say anything!!!

I cannot argue with your logic about watching the fantastic share price rise from 9c to 25c. That's only great if you don't watch the price fall back down to 9c again.

As Rove says - say hi to your Mum for me.

Duckman

 

[sandik17]

Hi Sandik

You said that one of the attractions of ENG and VOIP was ease of use and implementation, then you mentioned that businesses wouldn't go through the hassle of changing companies for a few dollars. Well which one is it - "a hassle" to get connected or "quick and easy" to get connected?

As Rove says - say hi to your Mum for me.

Duckman

Quite obviously you haven't delved into VoIP very much Duckman. You see part of the attraction of Eng is just that...it's easy setup...as opposed to 'dodgy bro's' cheaper VoIP service. Yes, there are many, many other VoIP providers who are offering even cheaper services than Engin, but they are much harder for the everyday user to set up.
So you see VoIP CAN be "a hassle" to connect with some providers, yet "quick and easy" with Engin.
A trip to Harvey Norman/Dick Smith/Tandy/HT/Big W/Leading Edge/Office Works ... is all you need to get started. Surely you'd have one of them around, and you'd learn for yourself how easy it is to get set up with VoIP.

 

[pch]

Can you list some examples of their competitors that are harder to set up? Iinet give you a box and you plug it in, just like Amnet.

Those guys can bundle your voice + internet together - one bill, better quality of service.. This argument seems very subjective..

I read their 19/1/06 market update and their financials from the 04/05 financial year. Seems to be a hard stock to figure out. They had a dispute with Vodafone and without those proceeds went backwards.. a lot of the stats they used in their market update about voip uptake stats didn't mean much because VOIP at the carrier level and voice at the last mile are completely different yet they used carrier stats.

They had only $600000 of cash at the end of 05 and had to offer a private placement to some intitutional investors gave for another $4.1 mil.

The relationships with the retailers is definitely a plus.. but without a relationship with a major ISP, I can see a lot of their market share eroded in future..

I worked for an ISP who was one of the first nationally to offer broadband - and that ISP no longer exists

 

[sandik17]

Can you list some examples of their competitors that are harder to set up? Iinet give you a box and you plug it in, just like Amnet.

I know from spending time on whirlpool that astratel are not easy to set up and their customer service is almost non-existant.

 

[pharaoh]

Guys

I have read thru your entire thread.
Duckman, I understand your thoughts, but you seem very negative to the stock, unless you are just trying to make some kind of moral point.

I am actually in the industry, and I know why ENG will not only succeed but also return a healthy return to investors.

1. You mentioned Iinet. Come on, Engin have by far, massively better priced plans than Iinet and others. So, 10c anywhere in Aust, 29c to mobiles. Do the research, none compete.

The others are too hard to set up, and use - I have tried a few now.
I use my normal cordless Uniden, works great. QOS is on the router I use, so it rocks.

2. Ease of use - within 6 minutes I was up and running

3. Market and exposure - Advertising on TV, radio etc. Also, I called them on friday and they had an ABC TV crew just leave, doing an article on how well they are doing, which will be aired shortly.

4. Cashflow - you mentioned they weren't even turning a profit - they are on track for mid year break even. They released those share placements to generate money for marketing etc.

5. New subscribers - on friday I called and pressed 1 for sales. After 29 mins I got put thru. Yes, it sucks being on hold that long, but hey, the guys said there were ****loads of people, all day, lined up to sign up.
2GB did a phone in on VOIP and heaps of people talked up Engin and how good it was.

Sandick, good on you for picking this one.

I only hold a few thousand shares, and didn't get it as early as 13c or so, but am a believer, as a very happy customer, and an investor, that you will see the sp rise to near $1 this year.

Don't worry about one negative post, everyone else seems v confident, so you can be too.

I will be buying more first thing monday morning, and holding for the next 12 months or so.

Would be interested to hear your thoughts.

Pharao

 

[sandik17]

Guys

I have read thru your entire thread.
Duckman, I understand your thoughts, but you seem very negative to the stock, unless you are just trying to make some kind of moral point.

I am actually in the industry, and I know why ENG will not only succeed but also return a healthy return to investors.

1. You mentioned Iinet. Come on, Engin have by far, massively better priced plans than Iinet and others. So, 10c anywhere in Aust, 29c to mobiles. Do the research, none compete.

The others are too hard to set up, and use - I have tried a few now.
I use my normal cordless Uniden, works great. QOS is on the router I use, so it rocks.

2. Ease of use - within 6 minutes I was up and running

3. Market and exposure - Advertising on TV, radio etc. Also, I called them on friday and they had an ABC TV crew just leave, doing an article on how well they are doing, which will be aired shortly.

4. Cashflow - you mentioned they weren't even turning a profit - they are on track for mid year break even. They released those share placements to generate money for marketing etc.

5. New subscribers - on friday I called and pressed 1 for sales. After 29 mins I got put thru. Yes, it sucks being on hold that long, but hey, the guys said there were ****loads of people, all day, lined up to sign up.
2GB did a phone in on VOIP and heaps of people talked up Engin and how good it was.

Sandick, good on you for picking this one.

I only hold a few thousand shares, and didn't get it as early as 13c or so, but am a believer, as a very happy customer, and an investor, that you will see the sp rise to near $1 this year.

Don't worry about one negative post, everyone else seems v confident, so you can be too.

I will be buying more first thing monday morning, and holding for the next 12 months or so.

Would be interested to hear your thoughts.

Pharao

Thank you thank you thank you!!
It is so nice to hear someone in the industry give such support to this stock. I think Duckman could learn a lot from your wisdom. I too will be putting in another order on Monday. Bring on that report on Thursday! Well done pharoah - keep up the good work.

 

[Duckman#72]

Guys

I have read thru your entire thread.
Duckman, I understand your thoughts, but you seem very negative to the stock, unless you are just trying to make some kind of moral point.

I am actually in the industry, and I know why ENG will not only succeed but also return a healthy return to investors.

1. You mentioned Iinet. Come on, Engin have by far, massively better priced plans than Iinet and others. So, 10c anywhere in Aust, 29c to mobiles. Do the research, none compete.

The others are too hard to set up, and use - I have tried a few now.
I use my normal cordless Uniden, works great. QOS is on the router I use, so it rocks.

2. Ease of use - within 6 minutes I was up and running

3. Market and exposure - Advertising on TV, radio etc. Also, I called them on friday and they had an ABC TV crew just leave, doing an article on how well they are doing, which will be aired shortly.

4. Cashflow - you mentioned they weren't even turning a profit - they are on track for mid year break even. They released those share placements to generate money for marketing etc.

5. New subscribers - on friday I called and pressed 1 for sales. After 29 mins I got put thru. Yes, it sucks being on hold that long, but hey, the guys said there were ****loads of people, all day, lined up to sign up.
2GB did a phone in on VOIP and heaps of people talked up Engin and how good it was.

Sandick, good on you for picking this one.

I only hold a few thousand shares, and didn't get it as early as 13c or so, but am a believer, as a very happy customer, and an investor, that you will see the sp rise to near $1 this year.

Don't worry about one negative post, everyone else seems v confident, so you can be too.

I will be buying more first thing monday morning, and holding for the next 12 months or so.

Would be interested to hear your thoughts.

Pharao

Hi Pharaoh

Thanks for your input. Sandik will be pleased!!

Firstly I was not trying to make a moral viewpoint although thankyou for reading it that way - you might enjoy some of my other posts in other threads.

I wouldn't call myself "very negative" towards this stock. I don't like labels but if I have to I would classify myself as "pessimistically cautious". I could say the same thing in return to you - as you seem very positive towards the stock. We both have our beliefs and arguments but it doesn't mean either of us are correct.

Just to let everyone know - I am not a ENG shareholder, nor have I ever been. I am not in the IT/telco industry. I do not subscribe to ENG nor to any of its competitors. Where am I going with this? Unlike yourself, Sandik, Porper and Mumbank it doesn't bother me at all what the share price does. One might argue that being at arms length with this stock enables me to be a little more objective than others.

I read your comments and take them on board but just like Sandik your post is full of "promise and hope" stuff. It frustates me when people write "the SP should rise to near $1 by the end of the year" without any real fundamental supporting arguments. Why should the price near $1? Because of the good vibes experienced on the Whirlpool forum? Or based on the report to be shown on the ABC soon? Or perhaps the poll taken on 2GB?

I agree that it is an exciting little company but let's chill out and reflect on the facts. I am just trying to bring a little balance.

ENG is a very small player in an extremely competitive market where margins are tiny and you need volume, volume, volume of subscribers. They currently do not have enough subscribers to even breakeven let alone pay a dividend (although I admit that market share has experienced strong growth). They market themselves on ease of use and pricing which is basically the same as the dozens of other VOIP providers. (If you don't believe me, just goggle "voip providers" and have a compare). Finally- don't forget that Telstra and Optus haven't seriously entered the market. ENG should make hay while the sun shines.

At the end of the day, if the share price hits $1 around Christmas and you all sell out - wonderful, I will be wrong and you will have made some tidy profits. I wish you the best of luck with that. But if it doesn't happen then it will make some of these positive, optimistic posts appear like no more than hopeful ramping.

Regards

Duckman

 

[pharaoh]

Hi Sand And Duckman

I think we all have our opinions on our stocks. Duckman, you make some good points, and one or two are a bit astray or could be more precise. i.e. # of subscribers to break even - let's just see on thurs, with the ann. When they get to 30k subscribers they will be trading profitably.

There is no point arguing our points even further, I have never been accused of ramping and never want to, and am sure Duckman doesn't want to be seen as overtly negative towards one stock for emotional reasons.

So, I'll personally just post any updates I feel are worthwhile, and try to keep emotion out of it - you have to be impressed with that white flag duckman

You make some good points, and I guess it is best to accept that ENG is a little company doing extremely well right now, and is early days.

I will close by saying that this week the proof may be in the pudding, in terms of seeing if it is now doing as well financially as it is in signing up subscribers and marketing itself.

Duckman, I have seen you post a bit, and you seem well respected, so I am sure you can respect me comments above and lay off a little, especially if the results are good this week.

It's best if we can all post updates on stocks we like without being worried about constant negative posts (you included with stocks you like), constructive points of view are always welcome, of course.

I don't get emotionally entagled in stocks, but for some reason, "believe" in this one and always have.

Thanks for the well wishing on the stock in the end, I do also hope it gets to that point, and will be keeping fingers crossed this week.

Good luck with your investments.

 

[Duckman#72]

Hi Sand And Duckman

I think we all have our opinions on our stocks. Duckman, you make some good points, and one or two are a bit astray or could be more precise. i.e. # of subscribers to break even - let's just see on thurs, with the ann. When they get to 30k subscribers they will be trading profitably.

There is no point arguing our points even further, I have never been accused of ramping and never want to, and am sure Duckman doesn't want to be seen as overtly negative towards one stock for emotional reasons.

So, I'll personally just post any updates I feel are worthwhile, and try to keep emotion out of it - you have to be impressed with that white flag duckman

You make some good points, and I guess it is best to accept that ENG is a little company doing extremely well right now, and is early days.

I will close by saying that this week the proof may be in the pudding, in terms of seeing if it is now doing as well financially as it is in signing up subscribers and marketing itself.

Duckman, I have seen you post a bit, and you seem well respected, so I am sure you can respect me comments above and lay off a little, especially if the results are good this week.

Thanks for the well wishing on the stock in the end, I do also hope it gets to that point, and will be keeping fingers crossed this week.

Good luck with your investments.

Hi Pharoah

I accept the white flag and offer my own peace pipe in return!

Your post makes a lot of sense.

Good luck with the report on Thursday and go easy on me if the SP immediately rockets!!

Regards

Duckman

 

[pch]

My posts were also not 'anti' this stock, but based on my experience working for such companies.. I personally like to see lots of negative comments on forums because it helps me to test/validate my fundamental assumptions and somethimes people come up with things that I have overlooked. Don't take it personally..

Also IInet's experience has been an interesting one for me which I think can happen to any Telco. Friends of mine that I highly respected (including probably the best person in his field in WA) were hired by IInet. From there, I know that they were going to do well (that was at 60c).

They have since made solid profits, had phenomenal growth and had a great return.. until Telstra restarted its fight with the ACCC and the stock vaule went from $3 to $1.50.

Keep a very close eye on competitors. Just because a company is the first to something, doesn't mean they will win.

Good luck with them

 

[pharaoh]

Hi guys, thanks for the feedback.

And don't worry duckman, I won't brag when it does go up.
Or, will try not to anyway