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Engin and Seven buy major stake in Unwired

Engin and Seven buy major stake in Unwired

Voice and VoIP vendor punts on WiMAX ahead of TiVo

VoIP-in-a-box vendor Engin has bought a 10.4 percent stake in wireless broadband merchant and WiMAX evangelist Unwired, using a debt facility provided by the Seven Network.

Engin announced its investment to the ASX following a Monday call for a halt to trading. Engin said in a statement that it had made "a number" of on-market transactions, adding up to 26 million shares at about $0.40 each.

The deal makes Engin a major Unwired shareholder.

"A combination of Unwired's wireless access services with Engin's broadband telephony and TiVo offering would deliver a compelling consumer proposition," Neil Gamble, Engin chairman, said. "We see our services operating on multiple devices across multiple access technologies."

Ilkka Tales, chief executive at Engin, said WiMAX - despite technology delays this year from major vendors including Intel - was coming of age. He said WiMAX would likely prove the global standard for delivering high-bandwidth data services.

"We think it looks very positive. The more carriers involved in supporting a particular technology, the more vendors [join in]," Tales said.

David Spence, chief executive at Unwired, said the company, which had "four or five" resellers for its portable wireless broadband solutions, was working hard to get WiMAX-ready by 2008.

Although Unwired has focused on consumer retail, many more opportunities for resellers were in the pipeline, he said.

"We certainly plan to wholesale or provide our network to other parties who might use it for specific applications, like smart grids," Spence said.

Unwired has never made a profit. However, as Spence pointed out, it has signed up 77,000 customers and shrunk its net losses 26 per cent to $25.2 million in the year to June 30. Operating revenues were up 44 per cent to $33.8 million.

"We won't see [WiMAX] chips in laptops [for a while] but certainly right around the world now we're starting to see a move towards WiMAX," Spence said.

Engin also is not a profit-making concern. However, Tales said Engin resellers need not fear the vendor would rob Peter to pay Paul - taking money from channel initiatives to service its Seven Network debt or TiVo investments.

Unwired has basically cornered the market in metropolitan WiMAX spectrum across Australia, buying up most of what was available early in the game with a strategy of capital-raising and borrowing. According to the company's website, it is eyeing Mobile WiMAX/4G investment as well.

Tales said Engin had partnered Seven to bring TiVo to Australia in early 2008.

No repayments are required until 2009, with full repayment due 2012. There are no plans to take over Unwired, according to the ASX statement.

Engin closed up 26 per cent to $0.42 a share on September 3.


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