2degrees may have won market share far faster than analysts anticipated, but the customer grab has come at a high price.

The US-controlled company made a net loss of $78.6 million on revenue of $107.6 million for the 12 months ending December 31, 2010, according to documents filed with the Companies Office.

The revenue figure gives body to the carrier’s recent claim that it has 580,000 active connections, representing around 11% of the market.

In 2degrees’ only other filing, for the nine months ended December 31, 2009, the company posted a loss of $51.8 million on revenue of $27 million.

2degrees launched in August 2009.

The privately-held company has never set a target date for making a profit, but has said it expects losses for several years.

Telecom doesn't break out profit and loss figures for its mobile operation, which sits within its retail division.

For its 2010 financial year, Vodafone NZ made $122 million (down from $178 million in 2009) on revenue that was static at $1.6 billion. Vodafone has around 2.5 million customers.

Ad spend leaps
The company’s wage bill rose from $20 million for the nine months to December 31 to $36 million for 2010.

The company spent $18.1 million on advertising and marketing for 2010 versus $8.5 million for its nine-month 2009 period.

More money raised, more on the way
During 2010, 2degrees upgraded its network to 3G. Existing shareholders put an extra $87 million into the company over the year to fund the expansion, launching a retail network and day-to-day running costs. The extra capital put 2degrees’ total investment so far to $US400 million.

The carrier has also secured $100 million in vendor financing from its main telecommunications equipment supplier, Huawei (a deal initially announced in February). 2degrees expects to access the money over the next 24 months as it expands its network (currently the company has its own infrastructure in Auckland, Wellington, Christchurch and Queenstown. In other areas it relies on a domestic roaming agreement with Vodafone).

Maori holding falls in share reshuffle
With not all parties able to fully participate in new share issues, there has been some reshuffling of 2degrees’ holdings over the past year.

Seattle-based Trilogy International Partners, which has investments in phone companies around the world, has increased its majority control (in February 2010, Trilogy gained Overseas Investment Office approval to take 100% control of 2degrees should circumstances arise).

Trilogy now owns 58% of the company.

The Hautaki Trust, which brought vital, government-discounted iwi spectrum to the company, saw its holding diluted to 10% from 13%.

KLR Holdings, the Hong Kong-based investment vehicle of 2degrees founder Tex Edwards, sold around half its holding during the year and now has a 1.15% stake in the company.

Amsterdam based Tresbit B.V holds 28.5%. During the year, Tresbit took on the investment formerly held by UK-based CVP.

Private equality value increases 
2degrees lists its total shares (in New Zealand dollars) at $330 million for December 31, versus $244 million at the start of the year.

Using the Black Scholes framework, the company priced its private equity shares at $US0.89, an increase over the $US0.62 listed in the company’s 2009 statement.