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Comindico customers support new owner

Comindico customers support new owner

Wholesale customers of Comindico are supporting the network provider's new owner, SP Telemedia, claiming the deal will ensure a healthy level of competition remains in the market.

OzForces director, Chris Meder, said SPT's purchase of Comindico was the best possible outcome for the wholesaler.

"They needed someone with funding to take over the business as a whole," he said. "It's a good move for Comindico: it was better SPT take over than Optus buying them. It will benefit Comindico customers."

SPT snatched up the entire assets of the Comindico business last week after the wholesaler was forced into receivership. The deal was estimated to be worth between $26 million and $39 million - a fraction of the $400 million poured into the company since its launch.

The telco was successful against a pool of potential candidates, ranging from telco giants Telstra and Optus, to PowerTel and Comindico's largest DSL wholesale customer, Dodo Internet.

In a statement issued to the Australia Stock Exchange, SP Telemedia (SPT) said the acquisition would allow it to expand its regional IP broadband network and significantly increase its capital city presence.

"The acquisition will also enable SPT to add a number of new products to the current SPT product suite, mainly in the voice, dial-up Internet and broadband markets," the statement read.

More importantly, it said, this would be "owned" infrastructure.

SPT's network provides broadband and data networking products and services along the Eastern seaboard. Its mainstream telecommunications products to homes and businesses are operated by its subsidiary, Kooee Communications.

In August, the company acquired Newcastle-based NBN Television from Washington H Soul Pattinson for $145 million.

Telco analyst, Paul Budde, said SPT's takeover of the Comindico network would allow it to continue to compete on a level playing field with other telcos.

"There was no reason for Telstra or Optus to use the Comindico network as a competitive advantage; rather, each would have used the acquisition to take out another wholesale competitor," he said.

"Both would have integrated what they could use from the network."

While there will be a small overlap in infrastructure, Budde said the combination of the SPT and Comindico networks would allow another big infrastructure player to come to the crease. In turn, this would keep prices at a reasonable level.

"With SPT, the costs of the network go down dramatically, and are part of a larger scale operation. This will make services more affordable for everyone," he said. "It's a much better platform for Comindico to continue. Their network was the Rolls Royce model, but people only wanted to pay for Toyota. With SPT behind it, the network can now be offered at the right price point."

Although SPT has assured customers it will continue to operate all existing services as normal, the company is yet to make any projections on the future of the wholesale DSL and communications businesses.

However, OzForces' Meder said he was confident it would continue to operate both a wholesale and retail division.

"I wouldn't be surprised if they built up the wholesale services side," he said. "It's a profitable side of the business."

Like OzForces, current Comindico wholesale customer, Inspired Networking, will also continue its partnership with the network operator.

The ISP's managing director, Ian Bergman, said it was excellent a resolution had been achieved so quickly.

"Compared to other telco collapses, which have taken years to come about, this is good news," he said.

SPT was contacted for comment for this story but did not respond by press time.


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