Investor presentation

9 September 2009

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Overview of ComTel: Business Overview

Positioning

Become a leader in online and mobile database advertising

Mobile

• Managed decline of mobile earnings

• Focus on churn reductionand retention of highvalued customers

• Strong cost control management

• Increased focus on opportunities around prepaid revenues

Media

• Maintain our leading position with agencies as the preferred supplier of incentivised EDM

• Transition operational management from founderto ComTel management

• Invest in personnel and IT systems to capitalise on future opportunities

• Focus on quality of responses and activity from membership database during economic downturn to meet client expectations

ComTel Corporation

TOTAL TURNOVER $30.8m

Media

FY09 Revenue: $6.5mFY09 EBITDA: $2.6m

Mobile

FY09 Revenue: $24.3mFY09 EBITDA: $5.7m

Corporate

Overhead Costs: $2.1m

Group

FY09 EBITDA: $6.2m

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OVERVIEW OF COMTEL

DESCRIPTION OF PRODUCT• Empowered Communications (EC) is a web publisher and

owns Australia’s premium permission based email database of ~500,000 members

• Members sourced via EC network of six loyalty websites (each site rewards members in exchange for receiving research or emailed offers)

• Each website profiled by 19 demographic profiles and 53 special interest areas

• Overall demo/geo profile of EDM data in line with ABS population stats

• Advertisers and Research companies pay for targeted campaigns based on demographic profile sold direct through our own sales force

• Over 2,000 individual campaigns sent on behalf of 70 of Australia’s leading ad and research companies as well as > 300 direct clients

• Empowered work to performance cost metrics - Cost per thousand (CPM), Cost per Click (CPC), Cost per Acquisition (CPA)

• Core strength is relationship with agencies

EDM data sold byin-house sales force

AD AGENCYRESEARCH

DIRECT

More than 230,000 New Member Registrations over past year

Overview of ComTel: Empowered

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OVERVIEW OF COMTELOverview of ComTel: Empowered

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Profile Offering

• 18-39 yrs skew• Average Age: 24yrs

• Members are able to send SMSmessages from their computer or bid on Auctions using points earned

• 25+ yrs skew• white collar/decision makers• Average Age: 33yrs

• Online community to post and voteon polls. Points are redeemed as cash

• 25+ yrs skew• white collar/decision makers• Average Age: 33yrs

• Members convert points into donations for preferred charities, including Red Cross, Guide Dogs, Lifeline

Fuelgiveaway • 30+ yrs skew• AB demographic• Average Age: 30yrs

• Members earns entries to lottery draw to win one of twenty $500 vouchers each quarter

Big give away • 30+ yrs skew• AB demographic• Average Age: 30yrs

• Members earn entries for the chance to win $10,000 each quarter

PROFILING OF MEMBERS

When signing up members they complete a survey that allows targeting by:

• 19 demographic profiles

• 53 interest areas

Overview of ComTel: Empowered Websites

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THE INDUSTRY

• Online Advertising spend grew 19% FY2009 but slowed to 12% in last half as GFC took effect

• EDM falls into the “General”category of online advertising which includes banners and display ads (c$500m pa in total)

• Shift towards performance based methods of online advertising due to their measurable results, in particular search and performance ad networks

Online Advertising Expenditure – Total Spend by Category by Period

% Growth6 MthPeriod General Display Classifieds Serch and

Directories Total Period / Period

Year / Year

Jun 09 $235.5m $209.5m $447.5m $892.5m -2% 12%

Dec 08 $255.5m $221.5m $436.0m $913.2m 15% 26%

Jun 08 $209.0m $217.5m $370.5m $797.0m 10% 29%

Dec 07 $201.5m $189.5m $335.5m $726.5m 17% 25%

Jun 07 $165.5m $167.0m $286.7m $619.5m 7% 47%

Dec 06 $169.5m $170.0m $240.5m $580.0m 38% 62%

Jun 06 $133.5m $129.0m $158.5m $421.0m 18% 60%

Dec 05 $114.0m $114.0m $129.0m $357.0m 36% 59%

Jun 05 $80.0m $92.0m $91.0m $263.0m 17% 61%

Dec 04 $74.0m $77.0m $74.0m $225.0m 38% 64%

Jun 04 $54.5m $55.0m $53.5m $163.0m 19% 65%

Dec 03 $50.0m $47.5m $39.1m $137.0m 38% 51%

Jun 03 $30.5m $38.5m $29.8m $99.0m 9% 30%

Dec 02 $31.0m $32.0m $27.6m $90.5m 19%

Jun 02 $31.0m $28.0m $17.3m $76.4m

Source: IAB Online Advertising Expenditure Report June 2009

The Industry: Overview of Online Advertising

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• Redesign Smspup.com site in November 2009 and WDYT.com.au in February 2010

• Review and introduce new rewards to increase members response rates and reduce churn

• Infrastructure and software strategy to update all technology platforms to Php5 code base

• Continue to grow research revenue

• Continue to develop selling skills of sales team

• Focus on direct sales channel growth

• Communicate with agency media buyers about EDM category opportunity

Strategy:Key Initiatives - Empowered

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OVERVIEW OF COMTEL

• MVNO’s are resellers of mobile phone services purchased from Mobile Network Operators (MNO) (in this case Vodafone)

• MVNO’s operate independently of their MNO, set their own pricing structures, and provide billing services, usage plans and branding

• ComTel’s MVNO operates under several brands in pre-paid, post-paid and wholesale segments

• Network Agreement with Vodafone until 2011

Overview of ComTel:Mobile Virtual Network Operator (“MVNO”)

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THE INDUSTRY

• Australian mobile industry is highly penetrated with revenues of $14.4 in 2009. Growth of 10% over the year

• In the residential market, 63% of customers use postpaid and37% are prepaid users

• MVNO’s account for only 3% of Australian mobile user base. In prepaid, MVNO’s have an 11% share. In the low spend prepaid segment, MVNO’s have a 16% market share

MOBILE SEGMENT GROWTH

MOBILE SUBSCRIBER GROWTH

Source: Paul Budde Communication Pty Ltd

Low <$20Medium $20 - $40High >$40

PREPAID MARKET SHARE BY SPEND CATEGORY

Merrill Lynch Australian Wireless Forecasts Growth

FY08 FY09

Voice/access revenues Flat to negative

SMS revenues 18% 12%

Other data 73% 59%

TOTAL 9% 7%

The Industry: Overview of Mobile Industry

9Source: Roy Morgan

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OVERVIEW OF COMTEL

• Reward Mobile is a conglomeration of 3 orphaned customer bases (Mobile Innovations, Martin Dawes & AAPT)

• ComTel is not focusing on building its post-paid mobile base due to the high customer acquisition costs involved in competing with carriers including free handsets

• Post-Paid strategy revolves around maximizing NPV by maintaining and maximizing the value of the existing customer base

• The introduction of cap plans has meant a drop in average revenue but more importantly a significant drop in margins

• ComTel’s strategy to reward high value customers with new handsets to reduce churn and increase margin

Overview of ComTel:MVNO - Post Paid Offerings

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• Targeting low spend prepaid customers by offering the best valued plans in this segment:

- carriers focus on medium and higher value customers in prepaid with a minimum recharge of $20

- segment of the market is large with 1.7m customers.

• Advertising and distribution strategy:- direct response advertising campaign utilising

regional TV, magazines and online (mid-Sept)

• Channels to market:- Retail dealer network- Inbound contact centre sales team- Online sales through affiliates- Promotions to existing mobile customers and

Empowered members

PREPAID BRANDS – REVOLUTION AND JUST

Overview of ComTel:MVNO - Pre Paid Offerings

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FINANCIAL OVERVIEW

• mobile revenue decreased by 27% − largely as the result of the managed

decline in postpaid mobile revenue

• media revenue increased by 28% (on an annualised basis - acquired during FY08)

• restructuring costs of $0.4m represents redundancy costs and mobile brand consolidation expenses

• impairment expenses relate to software development costs associated with the closure of 2 member websites.

• The Company has income tax losses of $5.4m as at 30 June 2009 (utilisation subject to the same business test)

Financial Overview:Latest Results

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FINANCIAL OVERVIEWSALES BY DIVISION

EBITDA BY DIVISION*

Mobile EBITDA

•FY08 included $1 million non-recurring compensation income

•FY09 reflects the managed decline in post paid earnings

Empowered EBITDA

•FY08 annualised, Empowered acquired during the period

•FYO9 revenue growth offset by investment in marketing and personnel to provide for longer term growth

•FY09 included costs of transition period from owner to ComTel Management

Financial Overview:Latest Results

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* Before restructuring costs

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FINANCIAL OVERVIEW

• Intangible assets relate to the postpaid mobile customer base of $7.5m and media software of $1.8m.

• Good will relates to the Empowered Communications acquisition in October 2007

• Trade payables includes $3.2m payable on 90 day terms.

• Borrowings are $5.0m (face value) payable to Co-Investor, repayable over 2 years from January 2010 and a $1.0m (face value) convertible note payable in July 2010

Financial Overview:Balance Sheet

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• Earnings dominated by mobile contribution but media contribution will continue to grow.

• Successful recapitalisation of Balance Sheet in FY09.• Continue to explore online opportunities leveraging

our sales force and databases.• Assess and target prepaid niche markets.

ComTel:Summary and Conclusions

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