MDU Communications International, Inc.
OTC Bulletin Board : MDTV

MDU Communications International, Inc.

November 17, 2010 09:02 ET

DIRECTV® CapEx Dealer Agreement Expands MDU Communications' Options and Opportunities for Fiscal 2011 Growth

TOTOWA, NEW JERSEY--(Marketwire - Nov. 17, 2010) - MDU Communications International, Inc. (OTCBB:MDTV) has finalized a substantive growth initiative for fiscal 2011 - the negotiation and execution of an agreement whereby the Company will identify, construct, manage and service certain multi-family properties for DIRECTV ("CapEx Agreement"). This initiative will result in important and far-reaching growth opportunities for the Company in fiscal 2011.

The DIRECTV CapEx Agreement was executed by the Company on November 10, 2010 and, in essence, will allow the Company to leverage its existing management team, sales force, preferential vender relationships, experienced technician / construction / installation teams, customer care call center, subscriber management system and billing platform to provide these services to DIRECTV for the deployment of satellite systems and services to certain multi-family properties where DIRECTV is a party to the right of entry agreement. Once a multi-family property is identified by the Company, is under contract with DIRECTV and the satellite system constructed and activated, the Company earns fees from DIRECTV to provide certain services, including (i) activation fees generated from new subscription sales to residents in the property, and (ii) an ongoing percentage of the revenue generated by that subscriber as a management fee.

The CapEx Agreement reduces the Company's capital costs for certain subscriber growth areas – a pivotal option when capital, or the cost of capital, is prohibitive. This option will allow the Company to leverage its existing infrastructure, focus on subscriber growth, achieve profitability more quickly and reduce its reliance on debt as a means to fund new subscriber acquisition costs. The Company's current DIRECTV agreement and the new CapEx Agreement are, by design, mutually exclusive of each other. Prior to bringing a property to DIRECTV, the Company retains sole economic discretion as to whether it decides to build out and maintain ownership of a multi-family property or simply provide ongoing management, sales, service and maintenance for DIRECTV at the property. In anticipation of the execution of the CapEx Agreement, the Company has already submitted 14 properties to DIRECTV under this program representing approximately 3,000 units.

"Our focus in fiscal 2011 is on subscriber growth and improving financial performance and the above initiative is a very important step in that direction," commented Mr. Sheldon Nelson, President and Chief Executive Officer. "The multi-family subscriber market is one of the remaining markets ripe for development and DIRECTV is in a position to dominate new subscriber growth in this segment," Mr. Nelson added.

The Company intends to issue a follow up press release within the next week discussing preliminary fiscal 2010 results and other financial and growth initiatives.

About MDU: MDU Communications International, Inc. (OTCBB:MDTV) is a leading provider of premium communication/information services, including digital satellite television and high-speed (broadband) Internet services, exclusively to the United States multi-dwelling unit (MDU) marketplace - estimated to include 26 million residences. Through its wholly owned subsidiary, MDU Communications (USA) Inc., MDU Communications delivers DIRECTV® digital satellite television services and high-speed (broadband) Internet systems and is committed to delivering the next generation of interactive communication services to MDU residents. For additional information, please see www.mduc.com or contact Investor Relations.

"Safe Harbor" statement under the Private Securities Litigation Reform Act of 1995: This release contains forward-looking statements relating to financial information, property upgrades, strategic partner relationships, acquisitions, subscriber sales, subscriber and revenue growth and implementation of new programs and developments of the Company. Such statements involve risks and uncertainties which may cause results to differ materially from those set forth in these statements, including, but not limited to, changes in financial condition, efforts on behalf of the Company to close on acquisitions, properties and subscribers, obtaining property consents, integrating acquired assets, efforts on behalf of the Company to finalize and deploy certain programs, bringing to fruition strategic alliances and upgrade programs, fluctuations in operating results and operating plans, deployment of new subscribers and conversion of existing subscribers, market forces, supplier negotiations and other risks detailed from time to time in the Company's filings with the Securities and Exchange Commission, including, but not limited to, the Company's 10-K for year ended September 30, 2009 filed on December 29, 2009, and incorporated herein by reference.

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