earnings upgrade and completion of empowered

Could be why we have seen a return of interest over the last few weeks. Increase of $2 million to EBITDA. Moving along nicely.

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ASX Release
16 November 2007
Earnings Upgrade and Completion of Empowered
Communications Acquisition
Highlights
• CMO upgrades its forecast for the 2008 financial year from $6 million to
$8 million EBITDA.
• Completion of acquisition of Empowered Communications Pty Ltd,
Australia’s leading permission based online direct marketing provider.
Further to the Company’s announcement dated 29 October 2007, ComTel Corporation
Limited (ASX: CMO) today announced the completion of its acquisition of Empowered
Communications Pty Ltd, Australia’s leading permission based online direct marketing
provider.
CMO is pleased to advise that it expects the acquisition of Empowered to be revenue and
earnings accretive from day one, and on that basis, CMO has upgraded its forecast for
the 2008 financial year from $6 million to $8 million EBITDA to include Empowered’s
contribution post this transaction.
The $20 million purchase positions CMO as a leading mobile telecommunications
provider with proven infrastructure to meet growing demand for online and mobile
advertising.
CMO Managing Director David Sweet said that future growth for the largely saturated
mobile sector lies in redefining the mobile phone as an extension of the internet.
“CMO has structured its value proposition to capitalise on the convergence of smarter
mobiles, faster internet and a more consumer segmented approach to media,� he said.
Having attracted over 400,000 Australian members via its various ‘double opt-in’ valueproviding
websites, Empowered enables CMO to collect and mine member data that can
support targeted advertising campaigns. In the last year, Empowered has implemented
over 850 targeted online and mobile campaigns for major media buyers and their clients.
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“Using Empowered’s proven infrastructure, we can immediately package mobile phone
plans and services that cater to the specific needs of consumers, spanning individuals,
family groups, social networks and broader communities,� Sweet said.
Sweet also pointed to the potential for commercial and not-for-profit groups to build
their own branded mobile network in partnership with MVNE providers such as CMO, and
use these networks as an effective member communications interface.
CMO’s combined telecommunications and marketing expertise gives rise to three new
revenue drivers according to Sweet:
1. Consumers can access value, be it cheaper plans, call rates, free SMS, vouchers
or charitable donations in return for sharing information and completing surveys,
2. Organisations can leverage the growth in mobile use and sophistication to more
effectively advertise and communicate to existing and prospective targets, and
3. Community groups and commercial entities can create their very own mobile
phone network where demand exists.
“Merging Empowered’s members with CMO’s 135,000 mobile subscribers also presents
the opportunity to cross-sell its opt-in value offers and pre and post paid mobile plans
accordingly,� he said.
Empowered’s Chief Executive Paul Norton joins CMO’s management team and will
remain head of the acquired business.
A Strategic Fit
A vision of CMO is to establish itself as a leader in the convergence of mobile phones, the
internet and media communications. As this convergence grows, it is expected that
advertising revenues will rise, particularly as mobiles become more sophisticated. CMO
believes the mobile phone will evolve into an extension of the internet and that the two
mediums will continue to co-exist. Accordingly, CMO actively sought out an opportunity
to acquire a proven and successful internet partner who was profitable and generated
revenues from online advertising and marketing.
As the market looks for ways to bring these services together, the consumers
themselves will drive the success depending upon the services they value. A key
strength to the CMO / Empowered relationship is their shared belief that success in
marketing will be driven through a segmented sales approach to chosen markets. Both
companies already have a segmented approach to their products and offerings, which
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includes different brands for those chosen markets. Differentiated brands will form a
strong part of all future growth as this is the only way to truly deliver to the needs of the
customers and their specific segments. This also gives CMO a strategic difference to its
larger competitors whose generic brands do not cater to specific consumer needs.
Acquisition Details
Under the terms of the purchase agreement, consideration to be paid to Empowered
shareholders is $20 million and will be funded through debt facilities and the issue of 250
million shares in CMO at an issue price of $0.02. In addition, to drive the business
within CMO, there are earn out consideration provisions based on achieving EBITDA
growth targets for the Empowered subsidiary, and organic growth it generates in the
CMO mobile business in the financial years 07/08 and 08/09.
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About ComTel Corporation Limited
ComTel Corporation Limited (ASX:CMO), established in December 2004 and formerly known as
CommodiTel, is an Australian owned mobile phone company that offers pre and post paid phone
services via its network of MVNOs (Mobile Virtual Network Operator), including Just Mobile and
Reward Mobile. As an MVNE (Mobile Virtual Network Enabler) CMO packages minutes with
services for wholesale clients who operate their own phone and internet brands. CMO’s MNVO and
MNVE expertise combined delivers value-focused mobile solutions to satisfy niche consumer
communities looking to maximise efficiencies created by the convergence of mobile, the internet
and media.
About Empowered Communications
Established in 2001, Empowered runs a network of websites and loyalty programs for its preregistered
subscribers who simply respond to, or take part in, promotional and marketing research
campaigns in return for free rewards such as SMS’s, ring tones. Based in Melbourne, Empowered
has 11 employees and provides advertising services to some of the largest companies in Australia.
With outstanding member-management processes and expertise in web and mobile technologies,
Empowered has designed B2C and C2B communication solutions that deliver timely, targeted,
cost-effective and successful promotional and marketing research outcomes. In addition to
managing successful permission-marketing media channels, Empowered Communications also
provides a range of marketing technologies for businesses including eTicketing solutions, data
capture systems, data validation & cleansing systems and bulk two-way communication
technologies.
For further information: contact David Sweet, Managing Director, ComTel Corporation Limited,
0414 888 999 or Emma Cullen-Ward on 02 8915 9900 or 0414 989 137