Net2Phone reports prelim results; analyst not impressed
Turnkey VoIP provider Net2Phone said Q2 revenues were $20 million, up slightly from $19.8 million, in a preliminary report issued Wednesday.
The company also posted a net loss of $8.6 million, narrowed from a net loss of $9.5 million in the year-ago period.
Net2Phone's cable telephony division posted Q2 revenues of $300,000, up from $100,000 a year ago. In the quarter, the division inked VoIP partnerships with Millennium Digital Media, Bresnan Communications and Altice One, which represents some MSOs in Belgium, Luxembourg and France.
The company ended the quarter with more than 14,000 paying subs for its PacketCable-based and SIP-based services, which are offered in partnership with cable operators and other broadband service providers.
One analyst was not impressed with Net2Phone's gains on the cable telephony front.
IRG Research Senior Analyst Erik Zamkoff downgraded Net2Phone to "neutral," citing slower than expected progress and a failure to sign Liberty Media Corp. properties beyond Liberty Cablevision of Puerto Rico.
"Our initial investment recommendation was based on our view that Net2Phone would sign a significant portion of an estimated 19.0 million subscriber opportunity. To date, its solution is being marketed to only 1.9 million subscribers at five customers," Zamkoff said, in a research note. "We believe that the potential market for Net2Phone's outsourced cable telephony solution has diminished significantly."
Net2Phone, however, has named a cable advisory board that includes participation from executives at several large MSOs — including Comcast Corp., Charter Communications, Adelphia Communications and Rogers Cable - though time will tell if that translates into deals and deployments.
The board, chaired by Liberty Media Corp. Chief Technology Officer Tony Werner, also includes:
Mark Carleton, senior vice president, Liberty Media Corp.;
Steve Craddock, SVP of new media development, Comcast Corp.;
Wayne Davis, EVP and CTO, Charter Communications;
Chuck Dougherty, VP and GM, network infrastructure solutions, Motorola;
Mark Dzuban, vice chairman, CedarPoint Communications;
Marwan Fawaz, CTO, Adelphia Communications;
Nick Hamilton-Piercy, senior technology advisor, Rogers Cable;
Andy Paff, president & CEO, CedarPoint;
Dan Pike, CTO, GCI Cable and Entertainment.