** revenue up by 73% **

BROADTEL COMMUNICATIONS LIMITED 5COMMENTRY ON RESULTS

Revenue from ordinary activities increased by 73.4% on the previous financial year to
$8,509,364 (2003: $4,908,064). The increase was attributable to a bundled approach to telephony
sales and aggressive marketing that had a positive impact initially, but the margins were not
sufficient to be sustainable.

The consolidated net loss before income tax for the financial year was $1,459,515 (2003:
$1,419,123 loss).

The results were achieved due to the following factors: i.Despite an increase in sales over the financial year, margins were reduced because of
increased costs to achieve the higher sales. ii.Non-availability of equipment supply during a significant part of the year. iii.Reduction in operating costs in the second half following the business restructure from
retail to wholesale model. iv.Increase in average Airtime margins in the second half of the Financial Year. v.Better receivables collection in the second half of the Financial Year. vi.Better internal controls during the second half of the Financial Year.
Net Cash outflows from operating activities for the year ended 30 June 2004 were $ 1,401,230
(2003: $451,504). A majority of the increase in cash outflows from operating activities
occurred during the first half of the Financial Year and were contributed to by irregular
transactions possibly involving some senior management who are no longer with the Company