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Australia's Biggest TV Station Buys One Third Of Leading VoIP Provider |
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Written by Adam Gosling
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Thursday, 14 September 2006 |
Network Seven, Yahoo's Australian partner and the largest Free
To Air TV broadcaster in the country, will take a 33 per cent share in engin, the
country's leading VoIP provider.
Seven Network, one of only four free-to-air TV Broadcast
conglomerates in Australia, also owns the nation's second largest magazine
publishing group and a 50 per cent share in the Yahoo!7 portal joint venture.
Through its subsidiary, Seven Digital Media, the company plans
to invest a total of A$26 million to buy a one third share of the country's
number one retail VoIP service provider.
Seven will take 119 million shares at an average price of 22
cents each in engin subject to shareholder approval. A placement of 10 million
shares is already done, with the remainder being subject to a vote at a
shareholder Extraordinary General Meeting.
The Chairman of Engin, Will Jephcott said: "This proposal is
a watershed event for Engin and a landmark change for communications in Australia. This
strategic relationship will enable Engin to strengthen its market leading
internet telephony business and draws on Seven's content and digital media
experience to create an important broadband gateway that delivers competitive
services to all Australians."
Little wonder the engin share price has been bobbing about
like a cork in a swimming pool this last week. News that a deal was imminent
must have got out late last week, causing the share price to jump sharply on
Friday afternoon. No doubt the regulator will be looking closely at who
bought shares and just how they found out about the deal because the company's
Directors clearly spelt out to the ASX as late as Tuesday that no deal was ready
to be announced.
A trading halt was called on Wednesday ahead of what the company
described as a "significant announcement".
And significant it is. The investment by channel Seven comes
at a time when engin is making progress in developing other strategic
relationships including negotiations with PC and mobile handset manufacturers.
Engin has also been in discussions with Yahoo!7 in respect of partnering to
deliver VoIP services beyond its current PC to PC VoIM service.
Seven is the largest television company in Australia
reaching 74 per cent of the market through its owned and operated TV stations
and 98 per cent of Australians through its owned and operated stations and
affiliate agreements.
Pacific Magazines, the publishing company owned by Seven, is
the second largest magazine company in Australia behind Australian Consolidated Press owned by Publishing and Broadcast Limited (PBL), owner of the Nine Network and a joint venture partner in Microsoft's ninemsn .
The capital injection and strategic partnership all but
assures engin of continued operations and will be used to underpin plans to
accelerate subscriber growth by promoting its products and services through the
TV station, Pacific Magazines publications and the Yahoo!7 portal.
The company will also work toward the development of new
services which work across mobile and other consumer devices and will allow it
to acquire IP content services to be bundled with engin's voice products.
Seven will get three directors on the engin board (subject
to approval) Ryan Stokes, Bruce McWilliam and Rohan Lund will join engin CEO
Illka Tales, Chris Shaw and Neil Gamble under Will Jephcott (Chairman) in a newly
reconstituted board.
Stokes, a Director of the Seven Network said: "Seven is
rapidly developing its presence in new communications technologies and consumer
services, building on our strengths in media. We are developing a fully
integrated media company across all forms of communications and engin provides
a strong platform for our development in digital media.
"Engin is the market leader in internet telephony in Australia. With
its scalable customer platform and retail distribution network, engin is well
positioned to take advantage of the continuing rapid growth of broadband and
the bundling of digital consumer services with its telephony services.
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