MACQUARIE TECHNOLOGY GROUP LIMITED — AGM Information 2006

Nov 27, 2006

MACOUARIE TELECOM GROUP LIMITED

ANNUAL GENERAL MEETING

TUESDAY, 28 NOVEMBER 2006

CHAIRMAN'S ADDRESS

Ladies and gentlemen, good morning. I'm Robert Kaye, the Chairman of Macquarie Telecom Group Limited, and I would like to extend a warm welcome to shareholders to the Annual General Meeting for 2006.

INTRODUCTION OF BOARD

I would like to introduce you to the board members seated here with me this morning:

David Tudehope - David is co-founder and Chief Executive of Macquarie Telecom. In addition to supervising the general management and strategic direction of the company. David is also actively involved in Macquarie Telecom's participation in regulatory issues.

Aidan Tudehope - Aidan is co-founder and Chief Operating Officer of Macquarie Telecom. He has played a key role in establishing and growing Macquarie Telecom's Singaporean, data networking and Intellicentre strategies. Aidan is also responsible for the design and delivery of operational excellence within Macquarie Telecom.

John Palfreyman - John's career spans more than 20 years in the IT industry. He was executive chairman of 90 East Inc. an Australian supplier of managed security services to federal government agencies, until the company's successful trade sale in early 2004. John joined the Board in July 2004 and is chairman of the Audit and Risk Management Committee and a member of the Corporate Governance, Nomination and Remuneration Committee.

Stephen Butler - Stephen is currently executive vice president for S3 Matching Technologies, a telco billing systems specialist based in Texas. USA. He was formerly chief executive officer of PowerTel Limited, a position he held for more than three years until 2003. He joined the Board in July 2004 and is a member of the Audit and Risk Management Committee and the Corporate Governance, Nomination and Remuneration Committee.

I'd also like to introduce Albert Koolmees, the Company Secretary.

BUSINESS OF MEETING

I'll take a moment now to outline this morning's agenda. First you will hear addresses from me and then from David. We'll give you a brief overview of Macquarie Telecom's recent performance and overall business strategy. Then we'll proceed to the ordinary and special business of the meeting.

ORDINARY BUSINESS

We will consider three items of ordinary business today:

• 1. The receipt of the financial statements and reports;
• 1. The adoption of the remuneration report for the year ended 30 June 2006; and
• 1. The re-election of Stephen Butler as a Director.

SPECIAL BUSINESS

We will need to consider two items of special business:

• 1. The appointment of PricewaterhouseCoopers as auditor of the company.
• 1. The issue of options to the Chairman of the company.

OTHER BUSINESS

There has been no notice of other business validly given by any member under the Corporations Act 2001.

NOTICE OF MEETING

The notice of meeting was sent to all members. Can I take it that the notice of meeting convening this meeting is to be taken as read? Thank you.

MINUTES OF THE PREVIOUS GENERAL MEETING

The minutes of the previous general meeting of members of the company, which was the Annual General Meeting held on 29 November 2005, have been approved by the Board and signed by the Chair. The original minutes are tabled and are available for inspection by any member wishing to see them.

And now the Chairman's Address.

Once again, thanks for coming along today. This is my third AGM as Chairman, and I'm pleased to report to you today on what has been a significant year in the history of Macquarie Telecom.

At last year's AGM I explained how we planned to position Macquarie Telecom to better meet the needs of our clients and to position the company for future growth and profitability.

I spoke about progress with executing our capital investment plans and with upgrading our infrastructure to better support our full array of fixed tine voice, mobile, intelligent networks, and data hosting services.

Well I am pleased to report today the build phase of that program has been completed, delivering to Macquarie Telecom the Metro Access Network, a new generation network that places the company at the cutting edge of IP-based voice and data services.

Construction of the network was completed during the last financial year and already the rewards are beginning to flow through to the company and to its customers. The Metro Access Network will provide Macquarie Telecom users with leading edge managed security, lower support costs and enhanced management and diagnostic capabilities, all backed by our leading Service Level Guarantees.

The establishment of this exciting piece of infrastructure will help us to further develop data as a core offering of Macquarie Telecom's business.

Shortly I will hand over to the Chief Executive, David Tudehope. But before I hand over to David, I would like to review the past year, and briefly outline what the year ahead holds for the company.

The investment program I have discussed is already beginning to positively impact the company's financial results.

All units of Macquarie Telecom's business were profitable on an earnings before interest, tax, depreciation and amortisation (EBITDA) basis in the year that ended June 30.

• Total service revenue was \$249 million, an increase of 8 per cent compared with the year ended 30 June 2005

• Data revenue grew strongly to \$66.8 million and the data business won a number of new hosting clients during the period, including contracts with Civil Aviation Safety Authority and NRMA Motoring & Services

• The voice business generated revenue of \$149.3 million for the year, 0.8 per cent more than in the previous year, and the voice market was again characterised by intense pressure on prices

• The revenue mix continued to improve, with a bigger contribution from higher-margin areas. Data now contributes more than 26 per cent of Macquarie Telecom's service revenue, while voice now accounts for 60 per cent, down from 64 per cent in the previous year
• Mobile service revenue was \$21 million, 71 per cent more than in the previous year. Mobile has emerged as an important pillar in Macquarie Telecom's full-service offering and part of the company's ongoing strategy of offering bundled solutions to customers
• The Singapore business generated revenue of \$11.9 million for the year, an increase of 9.4 per cent compared to the previous vear. Singapore continues to be an important element of Macquarie Telecom's offering
• Overall, the company recorded an EBITDA profit of \$4.5 million, within guidance

Capital expenditure during the full year was \$14.8 million, in line with the previous 12-month period. For the Metro Access Network, total capital investment in the infrastructure build is expected to be approximately \$9 million, in line with expectations and with previous guidance.

Of the \$9 million, approximately \$6 million has been spent to date with the remaining \$3 million to be spent in the remainder of fiscal 2007.

So ladies and gentlemen, the foundations to deliver future growth have been laid. The first four months of trading for this financial year has demonstrated that we are continuing to build upon these solid foundations. Profitability for the first half FY2007 will be more than double EBITDA for the previous corresponding half.

The board, management and staff of Macquarie Telecom remain focused on executing our strategies, and working in partnership with our clients to deliver a high quality, bundled service capability.

To conclude ladies and gentlemen, Macquarie Telecom has grown to include a full array of services including fixed line voice, mobile, intelligent networks, data services and data hosting, serving more than one million business users a day. The momentum is with us and in the current financial year we aim to build on the solid hase we have created

I will now hand over to the David Tudehope, Chief Executive of Macquarie Telecom,