BigAir to launch 3G services after failed bid for Commander's iBurst network

Listed wireless broadband operator says it will transition existing iBurst customers to other wholesale offerings including new 3G services
BigAir will transition several of its iBurst customers to a new 3G offering

BigAir will transition several of its iBurst customers to a new 3G offering

BigAir (ASX:BGL) plans to transition several of its iBurst customers to a new 3G offering after its bid to acquire the network from Commander failed.

The listed company’s CEO, Jason Ashton, said it had several thousand iBurst customers but claimed the business only represented 5-6 per cent of its gross profits. Earlier this week, BigAir revealed Commander’s receivers, McGrathNicol, had rejected its bid to purchase the iBurst assets and will instead, shut the network down by December 19.

Commander acquired an 80 per cent stake in the iBurst network from its founders, Personal Broadband Australia (PBA), in July 2005.

“We have an existing wholesale agreement with Unwired, so we will transition some customers to that where it’s attractive, because it is a different technology platform,” Ashton said. “We are also going to announce some 3G offerings and are now in the process of finalising those. The 3G mobile network is similar to iBurst offerings and will suit those customers.”

He said it would wholesale 3G services but didn’t disclose which mobile operator it would work with.

Ashton planned to have services available within a couple of weeks.

BigAir initially approached Commander to acquire the iBurst business at the end of 2006, he said. The operator first began dealing with iBurst in late 2005 when it purchased OzEmail’s 3000-strong iBurst customer base.

“Commander’s management at the time thought it was worth more and the rest is history,” Ashton said. “The history of PBA has been filled with issues…the network has always been reliant on Telstra for its backhaul, which has placed a significant cost imposition on the business.

“But it’s sad to see the iBurst technology fading away as we always thought it was a good platform.”

Receivers, McGrathNicol, were appointed to Commander on August 7 and are finalising the sale of the business in two parts: Its telco arm, including the Commander Centre franchise network, and its managed services business. The receivers are expected to announce a sale by the end of October.

Alongside its iBurst negotiations, BigAir became the subject of a hostile takeover bid by rival listed operator, Clever Communications, earlier this month. The BigAir board has since recommended shareholders reject the bid.

“We see the Clever big as undervaluing the business.. but we’ve just got to let this process run its course,” Ashton said.