2degrees boss reveals break-even, million-customer target dates

2degrees will be cash-flow positive by the end of this year, CEO Eric Hertz told NBR ONLINE today.

Mr Hertz also said that the carrier will have more than one million customers by year’s end.

In its only publically reported full-year result so far, for the 2010 calendar year, 2degrees made a net loss of $78.6 million on revenue of $107.6m.

2degrees reported a nine-month period for 2009, during which it posted a loss of $51.8m on revenue of $27m.

The company launched its commercial service in August 2009.

At its most recent customer update, in February, privately-held 2degrees said it had 876,000 active customer connections (see each carrier's most recent customer total below).

Some of 2degrees' gains have come from an expanding total market as people use more SIM cards with multiple phones, USB sticks and tablets.

Some has come at the expense of Telecom (which has lost a net 187,000 mobile customers in its half year to December) and Vodafone.

2degrees director Bill Osborne told NBR ONLINE the company would be profitable by the end of this year, but declined to provide further details. 

A second director, Anthony Royal, would say only that 2degrees balance sheet was "moving in the right direction".

2degrees is majority owned by Seattle-based Trilogy International Partners, with minority holders including the Hautaki Trust, representing iwi who provided the company with its initial spectrum.

It recently announced it had secured a $100 million credit line from its network partner Huawei. The money being used to fund network and retail expansion.

Was Mr Hertz worried about recent controversy over Huawei - perceived as a national security risk by Australia's main security agency - being barred from bidding on the National Broadband Network across the Tasman?

"Telecom, Vodafone, and 2degrees all use Huawei infrastructure. We are confident in the security of our network and all the multiple systems from the dozens of vendors who make up the complete mobile network plumbing of which Huawei is only one," Mr Hertz told NBR ONLINE.

TOTAL MOBILE CONNECTIONS

Vodafone: 2,434,000
Telecom:  1,987,000
2degrees: 875,656
TelstraClear/MVNOs: 50,000

2DEGREES

August 2009: launches
February 2010: 209,000 customers
March 2011: 580,000 customers
February 2012: 876,000 customers

All carriers count each connection as a "customer", so a person with separate SIM card accounts for, say, a mobile phone, data stick and iPad, counts as three customers.