eng v mnf v fre

Why I believe ENG is the pick for potential share price increase in the VoIP space and why I hold a few ENG shares on the basis of the numbers:

ENG
Share Price 29/8/08 2.3c
Annual Revenue $20m

Market Cap. $14m
Net Assets $12m
Therefore..
ENTERPRISE VAL $2m

LOSSES:
HY Jun08 ($5m)
HY Dec07 ($7m)
HY Jun07 ($7m)
HY Dec06 ($7m)
------------------------------------------

MNF
Share Price 29/8/08 15.0c
Annual Revenue $7m

Market Cap. $8m
Net Assets ($2m)
Therefore..
ENTERPRISE VAL $10m

LOSSES:
HY Jun08 ($1m)
HY Dec07 ($1m)
HY Jun07 ($2m)
HY Dec06 ($1m)
-------------------------------------

FRE
Share Price 29/8/08 20.0c
Annual Revenue $5m

Market Cap. $36m
Net Assets $11m
Therefore..
ENTERPRISE VAL $25m

LOSSES:
HY Jun08 ($4m)
HY Dec07 ($4m)
HY Jun07 ($4m)
HY Dec06 ($4m)
---------------------------------------

ENG HALTING THE BLEED:
Granted ENG losses have been shockers, which is why the share price is where it is.... BUT the company has indicated focus on aligning overhead to its revenue base. Its announced Jun08 quarter EBITDA loss reduced to $1m. So probably a $3m loss before tax HY Dec08 (including $1.7m depreciation).

ENG NEW REVENUE STREAM:
Launching Broadband service in October. Assume only 10% of their customers take a bundle - say this adds $50 per month in spend - 8,000 * $50 * 12 = $5m pa on top of the $20m they already generate with no marketing spend required as they already have the customers - just up-selling required. Margin from this will assist them get towards the cashflow breakeven in the second half of the FY.

ENTERPRISE VALUE COMPARISON:
The slam dunk from my view. ENG market cap of $14m, take off net assets leaves only $2m as what the market is valuing a customer base that generated $20m last FY.

I have no understanding on the FRE metric - maybe people know about something that I cannot see from reading what's been released to market.... so park that one.

Let's say MNF is valued fairly.....EV of $10m on a base that generated $7m last FY. What would this translate to for ENG's SP, if we assume they have stopped the bleed at ENG?

BLUE SKY STUFF:
When ENG achieves breakeven or better, they have the platform to further layer up revenue streams. Unwired/WIMAX, mobile voip etc as has been extensively discussed here. ENG has its backend and invested heavily in billing systems - refer to their balance sheet. Therefore have systems in place to layer up or back in other bases on to their systems.

What do you people think?