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Engin Invests In WiMAX ISP |
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Written by Adam Gosling
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Tuesday, 04 September 2007 |
VoIP service provider and triple play wannabe, Engin has announced the
acquisition of approximately 10.38 per cent of the ordinary shares of
Unwired through a number of on market transactions.
The VoIP player, which is part owned by the Seven Network, paid around 40 cents per share for the stake. The company says the investment should enable Engin, as a significant shareholder, to participate in the growth of wireless broadband in Australia. Engin recently announced its entry into the ISP business with a deal to provide naked DSL services via a wholesale virtual-ISP agreement with SingTel's Optus Communications.
Engin also announced a move into the triple play arena with a deal to become the face of TiVo in the Australian market. The TiVo Electronic Program Guide for PVR services will be delivered over the ADSL2+ and WiMAX services from Optus and Opel.
Under the name AUSalliance, Unwired, with Soul Telecommunications and Austar (which has the rights to most regional WiMAX spectrum after a spectrum swap with Unwired) put in a bid to secure Federal Government funding to provide broadband internet
services to regional Australia. The bid was unsuccessful, with the Howard Government instead electing to back the Opel bid which uses ADSL2+ and WIMAX over un-licensed spectrum to provide the services.
Opel is a joint venture between Optus Communications and regional services firm, Elders.
Unwired owns the rights to the vast majority of metropolitan spectrum in Australia for the licensed bands across which WiMAX will operate. It currently uses that spectrum to deliver services over a proprietary pre-WiMax specification, but has said it plans to build a fully standards compliant mobile WiMAX network next year.
Engin says the money for the acquisition comes from the debt funding provided by a Seven Network and was undertaken because it has been "closely following the global development of WiMAX, and believes the technology is well placed at a point of maturity to deliver both fixed and ultimately mobile broadband solutions to consumers."
In a recent inteview, Phil Dobbie Chief Marketing Officer at Engin told VoIP News the company had no plans to offer VoIP over the OPEL WiMAX network which is being built in regional Australia by the Optus/Elders joint venture. At the time Dobbie expressed some concern that the WiMAX network was not a proven platform for IP telephony.
"When we launch we will be providing a bundled service incorporating ADSL2+ and telephony on top of that," said
Dobbie.
"There is a scope to investigate the Engin telephony service over WiMAX," he said, "but the ADSL2+ is the technology we want to deliver over in the near term."
In today's statment, Neil Gamble, Executive Chairman of Engin said, "We see a strong rationale for Engin and Unwired working co-operatively. A combination of Unwired's wireless access services with Engin's broadband telephony and TiVo offering would deliver a compelling consumer proposition."
"As shown by our recent announcement to deliver ADSL2+ to customers, we see broadband access as an enabler of consumer services such as voice and TiVo. As we develop new capabilities in voice technology, we see our services operating on multiple devices, across multiple access technologies," Gamble added.
"Engin is happy to have secured the strategically important 10.38% stake in Unwired, but looks forward to exploring other options with the board of Unwired to unlock what Engin's directors believe to be substantial synergies and other benefits in leveraging the two companies' assets," the company said in a statement to the stock exchange.
While Engin is willing to explore cooperative ventures, it says there are no plans to launch a take over of the wireless broadband provider. However, it would not rule out a merger in the future.
With modest means and control of the premium WiMAX spectrum in Australia. Unwired is a prime takeover target for a well heeled operator looking to dominate the wireless broadband market in Australia's lucrative urban population areas.
Although Unwired has taken on additional captial investments from Intel, Mitsui and more recently a A$15 million equity facility from Cornell Captial Partners, the company has been slow to roll-out wireless broadband services and currently only provides access in metropolitan Sydney and Melbourne. Despite owning the WiMAX spectrum licences in all major capitals the company is yet to use that to deliver a WIMAX network even though the 802.16e standards for mobile WiMAX were ratified nearly two years ago in late 2005.
Unwired recently announced a net loss of A$25.2 million on revenues of A$33.8 million which were up 44 per
cent over the previous year's trading. During the year the company achieved a 30 per cent subscriber growth reaching about 70,000 users.
Unwired already has an agreement with VoIP services provider, Freshtel, which was announced in 2005. However this is little more than a marketing agreement. When it was launched, David Spence, CEO of Unwired said: "Unwired has looked at a number of VoIP services to enhance the suite of services we offer our customers. Freshtel's Firefly software offered the best combination of simplicity, pricing, call functionality including free voice-mail and call forwarding and is highly compatible with the Unwired network".
Unwired recommends an internet connection speed of at least 128Kbps for VoIP and offers its subscribers a A$10 of free
call credit upon signing up with Freshtel.
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