iiNet buys a slice of Canberra for $60m
TransACT gets sold for a song
Acquisition-hungry ISP iiNet has snapped up the pioneering triple-play fibre network TransACT Communications for $AU60 million, just a fraction of the value of the carrier’s network asset investment.
Speculation over the sale of TransACT had been mounting in recent weeks, as reported by The Register, with iiNet firmly mooted as the likely buyer. TransACT, which launched in 2000, has operations in the ACT, Queanbeyan, and regional Victoria, with 40,000 customers across the residential, SME, corporate and government market segments. The acquisition secures iiNet’s spot as the ‘number two’ broadband provider in the country.
iiNet chief executive, Michael Malone, said the transaction “provides a unique opportunity for iiNet to pick up significant network assets, while increasing its presence in the ACT and regional Victoria. This move will also accelerate our penetration of the lucrative SME, corporate and government sectors, a key strategic focus for us.”
He added that TransACT would also provide iiNet with the opportunity to deliver super‐fast broadband services in the region similar to its recently launched NBN plans. It is yet to be revealed how iiNet will treat TransACT’s expansive, 4,500 km network infrastructure which has featured over $US280 million in investment over its life-span from vendors including Nortel, Marconi, Cisco and Ericsson.
The TransACT network was a true pioneer of public-private infrastructure projects in the Australian telecommunications industry, utilising existing state owned utility assets from ACTEW to comprise the foundation of the network. The carrier suffered from the dotcom bust and competitive pressures but managed to continue trialling new services and technologies.
TransACT’s launch CEO Richard Vincent joined the project in its early stages, taking over from the founding chief to deploy and commercialise the project. Within 18 months, he grew the company from 10 staff to over 110 and attracted financial backers and vendor financing deals. When he left the company he commended the launch team, stating “where you couldn't go over the top, you went around and underneath, relentlessly exploring the problems from every angle until a solution was found.”
TransACT shareholding structure includes TVG TransACT Holdings SPRL, ACTEW, Prime Media Group, MTAA Superannuation Fund (TransACT) Utilities, Jemena ATA, Westscheme, Australian Capital Ventures and TVG Neighbourhood Cable Holdings.
In 2007, Prime TV acquired 10 percent of TransACT and foundation investor Hong Kong-based private equity group TVG increased its stake to 35percent.
Malone has yet to detail what will happen to TransACT staff but the senior executives have indicated that they will stay. He added that he also wanted to leverage the strong existing relationship between TransACT and ActewAGL.
TransACT’s CEO, Ivan Slavich, said “it will be great for TransACT, and our partner AtcewAGL, to have access to a leading national brand. iiNet’s reputation for excellent customer service and product innovation will be well received by our loyal residential, SME, corporate and government customer base.” ®