ENG - Engin Limited

[pharaoh]

Hi Ij

Good on you for following engin
I believe they will be a big player in the voip revolution we are seeing the start of just now.

On your point about the comments influencing people, I disagree.

I am influenced to a point, not to the point of buying perhaps, but I guess I draw up a shortlist from what I read, and then do my own research and then possibly buy.

People talking about stocks catches my attention at least, then I look further into it.

But anyway, I think it is a good thing, people shares thoughts, tips, etc and we can take or leave as we like.

Works well for me.

 

[Fab]

Still remain to be seen that Engin will become a big player in voip but I am likely I have put some money on it. The problem is voip won't jump until Telstra decide to at this stage or other SP offer new network

 

[pharaoh]

I think primus is launching their voip service if they haven't already.

Two things here -
1. This will raise awareness of voip as a good option for consumers.

2. Primus is in massive financial trouble, and may have to look at bankruptsy I heard. Don't quote me, but read it on friday

Think Engin's subscriber numbers for march will illustrate how much of a player they will be.

I heard on the grape vine today that sub numbers for this quarter, over the previous quarter, are up 60%

At this rate, they will hit 100,000 customers next year, dramatically changing their significance in the industry, and I imagine, their share price / value.

The next ann will, I think, prove to the market they are going ahead at full throttle.

Will post details on this as soon as I hear more, or when they ann it.

 

[Duckman#72]

Hi All

Another article for media watch.

There was a very ordinary report concerning VoIP in Tuesday's The Australian.

Quote...."More than 100 companies offer VoIP services in Australia dollars and the vast majority are local companies. ......the operators with the biggest subscriber bases were not necessarily the most profitable. There's a big difference between those who have subscribers and the percentage of those who are paying for things."

The article went on to say that the competition will be so tight that shortly we may see voice travel even become free. In that case money would be made through advertising rights - eg Google's Gmail.

They also interviewed Engin chief executive Ilka Tales who had this to say......"The pricing models will change as competition picks up. But will it become free? Only time will tell. It's a fairly competitive field, it's not for the faint hearted".

The article targets the key question that investors should be asking themselves. "VoIP may well be the next big thing in telecommunications - but how companies going to manouver themselves to make money out of it?" At present Engin's positive has been it's positioning and number of subscribers. But now the theory that subscribers alone will equal profits is being questioned.

Duckman

 

[pharaoh]

Not many could survive on that model.
Wholesale IP is not cheap, and revenues from advertising would be pretty hard to sustain, or keep paying the bills.

I read that article, I think Tales was just not denying it could happen.

Think this will be some time down the track.

Remember Goconnect - the isp that tried the same, but with internet.
They went bust, and no one else found a way to make it work, or pay the bills.

 

[YChromozome]

I think the article is spot on.

I can remember when iinet Launched their VoIP service. They gave it away free to every existing subscriber. Not long after, they made a statement of subscriber number and growth which after two to three months greatly exceeded that of Engin. However more than half of iinet's customers had never even logged into the service, and just many didn't know what it was, nor had ever spent a cent on it. It all depends how you want to play the market.

Generally, the VoIP providers that don't have a monthly fee offer 10c local calls, but timed national or intercapital calls. The ones that offer 10c untimed national calls have a monthly fee. Last week I was exposed to KoalaVoIP. They had no monthy fee - it was prepaid and offered 10c national calls anywhere in Australia. At the time I scratched my head and wondered in such a high volume, low margin business how they could even pay of their infrastructure, pay the light bill or pay staff? Needless to say, the call cost bounced to 15c and is now 20c, less than a week later.

I believe VSPs are going through the same phase than some ISPs were a year or two ago. They provide services under cost in the aim to capture large portions of the market and then hope to somehow make some money from it. This may also prevent larger players moving it. Anyone with a sustainable bussiness is probably not interested in a loss leader. Simon Hackett, the CEO of the larger Natonal ISP Internode was only saying yesterday that they are still trying to negotate a fair SS7 termination into the PSTN for its Nodephone VoIP service.

Engin is uniquely placed. In the short term at least, they have a sustainable business. There are plenty of VSPs that are not, and I believe there will be some consolidation in the industry over the next coming years. We have already seen the likes of People Telecom close down their VoIP infrastructure and move their customers to Engin under a wholesale deal.

Engin also have one of the largest ARPU (Average Revenue per User) in the industry if not the largest, and as the article quite rightly suggests, that is what makes for a profitable business, not the number of subs. As Engin charge a minimum of $9.95 per month, it means each and every one of Engin's customers are using the service and are using the service frequently enough to justify the $9.95 monthly fee. I think now when you look at Engin's position within the market, being somewhere in the top three providers, but will all their subs being paying customers you can understand why Engin will break even this year and is in such a good position.

Engin last week launched two business plans and hence is now at a stage of targeting the higher spend SMB sector. It is these bussinesses that are looking for not generally the cheapest provider, but one that will still be in bussiness next week. Running a business you don't want your phone number to go dead, because your provider, Budget VSP Pty Ltd went broke.

 

[pharaoh]

YChromozome, good post.

I keep seeing people posting about how many new competitors there are in the market, and predicting doom and gloom.

Many are providing 10c calls and either timed or higher std or intercapital, as you stated.

one issue I saw in the past being thrown around also was customer loyalty or sticking around. I think 2 points should be noted.

1. We are seeing that people get a regular australian phone number. Kids and techo's won't mind switching but 95% of the population won't want to keep telling family and friends about their "new" phone number...

2. Cost savings - Engin's pricing model is exellent. It is extremely low and with current volumes now and increasing month on month, they will move towrds profit, in a very short time. Let's face it, who is going to switch providers, and change phone numbers all over again, for the sake of saving 2c (i.e. if someone undercuts on national calls etc, local can't go down more) or international - and this is only less than 5% of call volumes for australian users according to figures from Telstra.

Sustainability, that's what will make Engin not only survive when most won't, but thrive.

Many of these new ones are 2 man bands, and reselling either engin or making 0.5 of a cent margin on each call, so won't have the cash to upgrade infrastructure or put on support staff.

So, good times will be ahead for engin and with their marketing campaign continuing, should see her break even soon and go on from there.

imo

 

[sandik17]

Engin is uniquely placed. In the short term at least, they have a sustainable business. There are plenty of VSPs that are not, and I believe there will be some consolidation in the industry over the next coming years. We have already seen the likes of People Telecom close down their VoIP infrastructure and move their customers to Engin under a wholesale deal.

Engin also have one of the largest ARPU (Average Revenue per User) in the industry if not the largest, and as the article quite rightly suggests, that is what makes for a profitable business, not the number of subs. As Engin charge a minimum of $9.95 per month, it means each and every one of Engin's customers are using the service and are using the service frequently enough to justify the $9.95 monthly fee. I think now when you look at Engin's position within the market, being somewhere in the top three providers, but will all their subs being paying customers you can understand why Engin will break even this year and is in such a good position.

Engin last week launched two business plans and hence is now at a stage of targeting the higher spend SMB sector. It is these bussinesses that are looking for not generally the cheapest provider, but one that will still be in bussiness next week. Running a business you don't want your phone number to go dead, because your provider, Budget VSP Pty Ltd went broke.

YChromozome, you are exactly right. This stock is a speccie (although hardly a penny dreadful! ) But it does have huge potential...be it short term (ie 12 months).

As VoiP (if not ENG specifically, although ENG is in the forefront due their advertising campaign) becomes more commonly understood/used and less feared, there are undoubtedly going to be competitors trying to undercut each other for their share of the market.

As you said...you have had personal experience with Koala...well likewise, I have had experience with Astratel...one voip company that are claiming to be 'up there' with Eng. This company does not charge a monthly fee like ENG. Their users experience many silent calls, and down time. It took me many,many hours to set up, and there was/is virtually no technical support. In other words...you get what you pay for! The other day they even had a problem.... AstraTel customer call records leaked!

As mentioned in previous posts ENG have come up with a product that is user friendly for the non-tech people who don't have the time to fiddle with settings. They have done a lot of advertising, and have their products accessible from many everyday stores and now they are making the package specifically for businesses.
Their management is sound and they are building a solid company in an unchartered field.
Sure, there is some risk involved....no-one really knows where VoiP is heading...although we do know that in the UK they are switching to voip by 2010. We also know of the huge increase of Broadband users in Australia, and how voip can make broadband affordable.
Engin are voip providers for another 12 companies offering voip...so even if you are with another provider, chances are that you are using ENG anyway (and ENG are obviously getting a cut of this).

IMO the foundations have been laid with this company...and laid on a rock. Between their increased home subscriptions, and businesses as well the future is looking good. Just waiting to see the break even figures which will be when this company really comes into it's own...and rightly so. At the moment, if you haven't used voip, and don't fully understand it's potential, I can see how you'd see it was even riskier than it is.
Cut and paste this and have a look....this company is a quality act.

Duckman, interesting article,(we haven't heard from you for a while while the sp has been soaring!) but do you think Ilka and co haven't thought about that before with people offering free voip. There are free voip providers out there now even! I think they have it covered...and who knows by then they'll probably be taken over and we'll all be sitting pretty by our pool with the proceeds of sale! Have a good weekend all...

http://play.viostream.com/?play=F18...lay=yes&video=1_2919_6231_0384K_Stream001.mov

 

[pharaoh]

Sandik, nice to see you around again, where have you been??

 

[YChromozome]

As mentioned in previous posts ENG have come up with a product that is user friendly for the non-tech people who don't have the time to fiddle with settings. They have done a lot of advertising, and have their products accessible from many everyday stores and now they are making the package specifically for businesses.

Yes, that is the other thing that sets ENG apart from the pack. As you say most of the techy people are into VoIP. Now it is becoming mainstream and being marketed towards the Mums & Dads. This is where the big growth will be.

There are only two players I know of that offer a box you can buy retail off the shelf, take home and simply plug'n'play. One is MyNetFone, the other of course is Engin.

Alan Kohler had written an article in the Sydney Morning Herald one recent weekend, claiming if If Coles doesn't follow Tesco into IP telephony, Woolworths will. He goes on to report "The world's biggest grocer, Tesco, which Coles makes a habit of copying (as do most other supermarket chains around the world), has just teamed up with a small listed Australian company, Freshtel, to sell internet protocol (IP) telephony through its 1780 UK stores."

What it didn't mention was Woolworths and Coles involvement with Engin already. Coles sell Engin voice boxes through its Officeworks and Harris Technology stores. Woolworths sell Engin through its Big W, Dick Smith and Tandy's stores. If both retailers already stock the line, It shouldn't be too long before they start turning up in Woolworths and Coles Supermarkets. On top of this Engin also has boxes on the shelf in Harvey Norman, Ingram Micro and Leading Edge Group, on the television on TVSN and home shopping channels etc.

There was mention of a recent survey of an entire 87 respondents from Whirlpool, a techy hangout, that stated the popular providers were Astratel (31 percent), Oztell (27.6 percent) and engin (23 percent).

I wonder how many Mums & Dads know who Astratel or Oztell is? Can you buy them in a retail store? Are they plug and play or do you need a IT degree to configure these providers and your own hardware?

____
Phone bills that don't suck

 

[sandik17]

Actually have another couple of jobs that have kept me occupied the last few weeks. I've been around watching though...and keeping a finger on the pulse. I'm waiting for these to come down again, so I can top up, after I cashed in a few at 45c....Eventually the only way is up for these shares, contrary to what some negative people trying to knock them down think. See what happens over Easter I guess?

 

[Duckman#72]

I read that article, I think Tales was just not denying it could happen.

Hi All

YChrome - I loved the post. Well researched and presented. Nice to hear some new input. You made some interesting points. Your argument about Coles and Woolworths is a good one. IMO it is the primary thing ENG has got going for it. Forget your subscriber growth - it isn't making money and there is no proof that bulk numbers will, in the future, be the frameowrk for the company to pay the bills anyway. If ENG didn't get a lions share of the VoIP market after burning through the Vodaphone payout then they don't deserve to be in business. Lets not get carried away.

I completely agree it has been very astute in getting it's foot in the door with Harvey Norman and Officeworks etc. But Coles and Woolworth's didn't get to be where they are through helping other companies. They won't continue to run with ENG unless it is going to be in the very best interest of Coles and Woolworths. They will drop ENG like a foundation rock if they can make more money with another provider.

Sorry Pharaoh - I didn't realise that you had read the article "Profits Prove Elusive for Net Phones". You usually keep us informed of media articles involving ENG. You must have accidentally overlooked that one.

Sandik - you have convinced me. When these shares come down further (and IMO they will) I will pick some up. No, I still don't like the company. But you guys have some much belief in this little company - it is a traders dream share!!!! The decision making process exhibited by you guys is ......"unique". Provided you don't mind investing in a company with negative NTA's there is bound to be more money to be made.

For the record I have only ever tried to provide a "balanced handbrake" to all the glowing tribute posts on this thread. I don't believe that through the tongue-in-cheek posts, I have ever implied that you won't make money buying ENG. I have just doubted the "money-in-the-bank", "bluechip" status that some of the posters have given it.

Hey - and don't forget who started the thread!!!!

Regards

Duckman

 

[YChromozome]

after burning through the Vodaphone payout

I hope not. I got some tidy dividends and capital returns from MOB as a result of that payout. Not all of it went into the engin venture.

But Coles and Woolworth's didn't get to be where they are through helping other companies. They won't continue to run with ENG unless it is going to be in the very best interest of Coles and Woolworths. They will drop ENG like a foundation rock if they can make more money with another provider.

That's one of the problems I saw with the Freshtel/Tesco deal. Freshtel is wholesaling a whitebox solution and expecting Tesco to rebrand it. Very much like the supermarket's EzyBanking products and in this situation as you say, if Westpac is not providing an big enough margin, but ANZ is, then before you know it there will be Woolworths/ANZ branded ATMs in most Woolworth Supermarkets, Dick Smith, Tandy and BWS stores.

I don't think VoIP in Australia is ready for a supermarket to rebrand such a service. However putting a already branded and supported Engin Voice box on the shelf and taking any retail margins is no different to a tub of margarine, except that the Engin Voice box doesn't need refrigeration!

There are multiple brands of margarine on the shelves, just like Dick Smiths also have the MyNetFone product sitting along side the Engin one.

 

[pharaoh]

Thanks for the info guys, good posts.
Duckman, no I have been happy with your posts in the past, you have been generally balanced, aand presented fact.
Yes, I did read that article, it has just been hard to keep up with postings of late with work getting in the way

I don't think anyone minds a balanced discussion, and thanks for starting the thread

Yes, let's wait and see what happens now. I want to see an ann soon, and think we will.

What do you guys think will be it's bottom point now? i.e. 30c

Hoping all the d/t's are out now, and it seems the buyers are lining up against the sellers finally now to support, and maybe push it up a bit again.

fingers crossed.

 

[sandik17]

Hi All

Another article for media watch.

There was a very ordinary report concerning VoIP in Tuesday's The Australian.

Quote...."More than 100 companies offer VoIP services in Australia dollars and the vast majority are local companies. ......the operators with the biggest subscriber bases were not necessarily the most profitable.
Duckman

Here's an example of a VoIP provider that ENG are up against. This provider is the one listed in the survey of 83 whirlpoolians (from the i.t. whirlpool site) as being the 'market leader' in Australia for VoIP. Not only do they take an i.t person to set up, offer very little support, but they are now compromising its customers' privacy!

http://australianit.news.com.au/articles/0,7204,18665780^15318^^nbv^,00.html

Yes Duckman, there MAY BE more than 100 companies offering VoIP...but you get what you pay for.
It also may not be the biggest subscriber bases being the most profitable, but indeed a quality product instead! I believe this is what ENG has.

Pretty quiet on the sales today by the way. Only $168 000 traded thus far.

This one may be of interest also...it's looking good !

http://australianit.news.com.au/articles/0,7204,18693348^15397^^nbv^,00.html

 

[sandik17]

Hi All

Sandik - you have convinced me. When these shares come down further (and IMO they will) I will pick some up.

Duckman, I have some news.... I don't know how much further these are going to come down...so you'd better put your order in sooner rather than later.
I just rang them to find out for my brother about their business plans (which are just fantastic by the way!) and after holding for a while...they must've been signing up others before me, they told me that businesses and home connections can keep their current telephone number which makes this whole deal look even more attractive. Basically people ring in on the old phone line, and you ring out on the new VoIP line. So Pharoah, there isn't even that issue of having to get new numbers.

The ENG guy also told me it was a particularly good month in March with another 5000 signed up! Just watch this go in the next few months....up up and away!
Actually, now you mention it...I think I might wish it down a bit more too, so I can buy in some more, don't want my brother holding more than me!

 

[Porper]

hey guys, back in the old day (few days ago) someone was hoping to re-enter at 26c.

who was it again so we can rub it in now :

Well, my re-entry point at 0.26 isn't looking so far fetched now

Probably won't go that low but will probably get below 0.30 where I will be in again.If this is the bottom of wave A, it will move up on the next wave then finish on the low of wave C.Hopefully from here it will make a long and steady rise with wave 1 beginning again.

Here is a chart for those interested.

Just as a note, DI- has crossed over DI+ today, could trigger a few chartists to sell, we'll see.

 

[Duckman#72]

Actually, now you mention it...I think I might wish it down a bit more too, so I can buy in some more

Be careful what you wish for Sandik!!! Here it comes.

I'm with Porper - looking at the chart, the 20's are beckoning, particularly if there is an overall market correction to help things along.

Thankyou for clearing up Pharaoh's post, althought I think you just took away one of his advantages ENG has over competitors.

Duckman

 

[ijudge]

Nonsense!


look at the buying support that kicked in when the price dropped to 32.5c

today look at the support at 33.5c

if you want some engin shares better line up now and pay up now
otherwise you will be lining up for shares at 45c post next announcement

ij

 

[pharaoh]

I have to agree guys

I thought it may drop to 28c or so, but now not so sure.
Buyers are lining up to keep it in the low-mid 30's me thinks.

imo

hoping so anyways