Truphone ramps up expansion plans after costly transformation

* Reported 2013 loss of 91.5 mln stg vs 2012 loss of 34.4 mln stg

* CEO says heavy investment phase largely completed

* Seeking fresh financing to sustain global network growth

By Eric Auchard

FRANKFURT, Oct 6 (Reuters) - Telecoms company Truphone will forge ahead with rapid expansion of its ground-breaking new business model, its chief executive said on Monday, as it seeks to reverse deepening losses stemming from heavy investment in the reinvention of its global network.

Previously known for its smartphone app for low-cost internet calls, Truphone has spent 200 million pounds since 2011 rewiring itself into a network for frequent business travellers and regular international callers.

This summer Truphone introduced a fixed-rate call and data plan for business travellers in 66 countries, allowing users to avoid costly roaming charges while outside their home countries.

"We are doing away with the concept of roaming," Chief Executive Steve Robertson said of a move intended to outflank the likes of AT&T (Sao Paolo: ATTB34.SA - news) , T-Mobile, Telefonica, Telstra and Vodafone by offering flat-fee rates and features such as global voicemail and voice recording for customers including some of the world's biggest banks.

However, development of the new model has come at a cost. The privately held London-based company, which is majority controlled by Russian steel magnate Alexander Abramov, said in a filing with Companies House last month that annual losses had widened to 91.5 million pounds ($146 million) in 2013, against a 34.4 million pound loss the previous year.

It also warned, not for the first time, that it needs to raise fresh financing if it is to remain a going concern.

Truphone has raised in excess of 300 million pounds in financing over the course of its eight-year history, company reports show, and officials said that it remains in talks with current and new investors to meet the shortfall.

"The funding situation isn't really one of great concern from our perspective," Robertson said. "It is quite a normal condition for us. Our investors are extremely committed and ... have supported us consistently over the past three years."

BILLIONAIRE BACKER

The company received 75 million pounds in early 2013 from two investors, including Abramov's fellow billionaire and former Evraz (LSE: EVR.L - news) business partner Roman Abramovich.

Neither Abramov nor Abramovich could be reached for comment on Monday.

In addition to its calling plan, Truphone offers personalised local numbers in each of eight countries - Australia, Germany, Hong Kong, Poland, Spain, The Netherlands, Britain and the United States.

Customers receive its patented high-capacity SIM card, which automatically connects to local phone networks in the eight markets as travellers enter those countries, eliminating phone or data roaming charges.

Former BT executive Robertson believes that Truphone's new offering will also prove attractive to individual travellers.

It still provides the voice-over-internet (VOIP) app for consumers but now makes 90 percent of its revenue from its multi-local SIM cards.

"In the next 12 months, we will be looking at moving to consumer markets as well as serving our core enterprise customers," Robertson said of its SIM-card plans.

Truphone is also planning for a quick doubling of the number of countries where it offers personalised numbers and local dialing plans. "It may be that we accelerate expansion even beyond that," he added.

The company considers the heavy investment in the transformation of its business to be largely complete and has been adding staff aggressively over the past 18 months, roughly doubling its headcount to between 700 and 800 employees. (1 US dollar = 0.6250 British pound) (Editing by David Goodman)