26 Jan 2011

2degrees raises more cash from investors

6:54 am on 26 January 2011

Fledgling mobile phone company 2degrees is in growth mode, but an analyst has raised doubts about its ongoing financial sustainability.

The company gained more than 200,000 customers within the first few months of setting up last year, and aims to have 50 stores open by the end of this year.

2degrees reported a loss of $51.8 million in the nine months to December 2009. It is due to release its 2010 results later this year.

Last week, the company tapped its three main investors for more cash, issuing 6 million shares for $5.8 million.

Independent telecommunications analyst Paul Budde says the cost of building its network isn't covered by the revenue the company is getting from the low end of the market and it will have to start moving into more profitable services.