Better, faster, stronger

Telio, perhaps Europe's biggest (or would that be smallest?) success story in the commercial, access-independent VoIP space, reported Q1 results yesterday (apologies, no link available). Revenue NOK35m, EBITDA NOK7.8m (22% margin), net income of NOK5.3m. There were apparently some extraordinary items which boosted results, but on the face of it, at the current run-rate of growth, it looks like revenues for the full year might triple/quadruple vs. last year's numbers.

One interesting data point was that roughly half of the NOK10.6m costs booked as "other operating expenses" relate to customer acquisition costs. In other words, acquisition accounts for around 18% of total operating costs, and around 15% of sales. By way of comparison, in the financial year to March, Vodafone UK spent the equivalent of 15.4% of sales on acquisition and retention. Vodafone is an incumbent in a mature market looking to maintain its position and improve customer mix. Telio is a newcomer in a nascent market with a product which is still unfamiliar to most consumers, even in a sophisticated market like Norway. Interesting, then, that acquisition costs (relative to revenues) for the two are so close.