Broadweave chairman says installations drain cash flow

PROVO — The company that purchased the failing iProvo network last year is still experiencing growing pains, including a need to improve billing.

Some new subscribers of the Internet, video and phone services network are not billed immediately, said David Moon, chairman of Broadweave Networks.

That must be improved, Moon told the Provo City Council on Tuesday, because it hurts cash flow — and that's a continuing problem.

It costs the network nearly $800 to sign up a residential customer in equipment investments, he said.

"Growth ... has put us in a tight spot," Moon said.

The company has been working with investors to bring in fresh capital to meet growth demands and has a plan to close the gap between the time new subscribers sign up and when they are billed, he said.

More recently the company has been focusing on commercial sales and reconnects. Signing up commercial subscribers brings a faster return than residential customers.

"We need to have modest growth because of cash flow" and the initial investment it takes to bring new subscribers into the system, Moon said.

The company continues to add to its menu of services, including a new telephone service for small businesses that offers big-business features.

Broadweave bought iProvo in July for $40.6 million. Since November, to conserve cash, it has made its $277,000 monthly payment on the bond that funded construction of the fiber-optic network from the $6 million security deposit and letters of credit the company paid when it bought iProvo.

Moon said it's in the company's interest to stop using security money as soon as cash flow improves.

E-mail: rodger@desnews.com