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Tesco Shops For Mobile Freshtel |
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Written by Adam Gosling
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Wednesday, 22 November 2006 |
The relationship between Freshtel and its partner UK retailer
Tesco has stepped up to another level with a deal that will see Tesco's share
of the company reach 12.34 per cent.
Freshtel will use the A$12.3 million (£5 million) investment
to further its development and plans for commercialisation of converged mobile
internet telephony solutions.
Specifically; to "facilitate the development of the necessary hardware,
software and network to commercialise future internet phone services".
The equity deal will be carried out via a private placement with
Freshtel issuing 17,135,453 shares to Tesco, at issue price of approximately A$0.72
(the 5 Day VWAP price of Freshtel shares on 20 November 2006).
The Board has called an EGM for 22 December 2006 to seek
shareholder approval for the placement.
Michael Carew, Freshtel CEO, said "The opportunity that
internet telephony presents on the global stage is enormous. Tesco has shown
its commitment to this marketplace and this strategic alliance will firmly
place Freshtel and Tesco at the forefront of the global internet telephony
industry.
"Freshtel's business model revolves around partnering with
world leaders to establish a market presence. Its relationship with Tesco
continues to evolve in new and exciting directions, and we are thrilled to have
the opportunity to work together in helping to shape the market for years to
come.
The increased investment profile will also give Tesco a
Board seat with Andy Dewhurst, chief executive officer of Tesco Telecoms join
the Board of Freshtel Holdings.
"Tesco is delighted to be working in partnership with
Freshtel to extend our range of exciting internet telephony products and
services to UK
consumers," said Dewhurst.
"I look forward to working with the Freshtel Board to help
deliver these exciting technological developments to consumers, and to help
secure the support of new white label partners globally."
Further details of the alliance are set out in the Notice of
Meeting to shareholders for the EGM which will be dispatched today.
Background:
Tesco's relationship with ASX-listed Freshtel began less than 12 months ago when the retailer began offering its consumer-focused broadband telephony service based on the Fresthel whitelabel network. On the same day of the announcement of the deal, at the end of December 2005, Fresthtel announced Tesco's had invested A$3.7 million for 9,500,970 shares in the company. This gave Tesco a 6% share of the stock.
In September this year Freshtel announced it was working on a system that would allow users to make VoIP calls across its network using a standard 3G cell phone. The company has completed internal trials, but it was too late for Tesco which signed a deal in November to offer a mobile VoIP solution from British mobile VoIP provider, Mobiboo which allows for phone calls from WiFi hotspots, but using specialist WiFi VoIP phones rather than traditional mobiles.
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