Telstra buys into WLANs

Telstra buys into WLANs

Telecommunications giant Telstra has acquired the wireless LAN infrastructure assets of SkyNetGlobal for $3.3 million.

SkyNetGlobal provides wireless Internet access to roaming users at travel hotspots such as airports and hotels. It claims to have the largest wireless LAN network in the country. Building this network came at a high cost, however, and recently the ASX-listed service provider has come under scrutiny for its untidy balance sheet.

In its most recent quarterly report to the ASX, the company posted revenues of just $113,000 with a negative operating cash flow of $529,000. With little under half a million dollars left in the bank, the ASX queried the directors of the company earlier this month over the company's financial position. The directors reported that several major changes were on the way, one of which was to reinvent itself as a solutions-based service provider rather than continuing to build wireless infrastructure.

Telstra, meanwhile, was looking to make its own strategic play in the burgeoning wireless LAN market. For the sum of $3.3 million, it will soon be able to offer its customers wireless connectivity at over 40 hotspots around the country and into Asia.

SkyNetGlobal CEO Jonathan Soon said that the Telstra investment will strengthen his company's balance sheet enough to acquire more customers and perhaps even attain profitability. The two companies have also signed a mutual roaming agreement whereby their customers will be able to access each other's wireless LAN networks in existing locations.

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