Don't Write Off This Billionaires' Boys Club

When Australians James Packer and Lachlan Murdoch plunged into the telecommunications business together last year, some hoped they would fail. The pair, after all, were drawing on the cash and connections conferred on them by their billionaire fathers, publishing and entertainment heavyweight Kerry Packer and global media mogul Rupert Murdoch. The envious therefore had reason to be gratified when the news started to turn bad: Over the past 12 months, One.Tel Ltd., the Sydney-based telecom company in which Packer and Murdoch are half owners, has lost 74% of its market value and posted a $155 million loss.

In fact, no sniggering is in order. By many measures, One.Tel is highly successful. The company, which sells land-line, mobile, and Internet services, has more than 2 million customers in seven countries and expects to have twice as many in two years. Revenues doubled, to $346 million, last fiscal year, ended in June. And the company vows to become profitable next year. One.Tel is not in the big leagues, but it has grown quickly in just five years.