Telstra Acquires SkyNetGlobal Hotspots

By Niki Scevak

August 08, 2002

Australia's big T goes shopping and buys 50 hotspots for $3.3 million.

Telstra Corp and SkyNetGlobal Limited today announced two agreements that will see the startup sell its network of wireless hotspots, while beginning a relationship that will allow them to sell services on top of Telstra's newly minted infrastructure.

For the cash-strapped SkyNetGlobal it buys the firm more time. A few weeks ago, the company raised around $370,000 through a rights issue, which was in addition to the $469,000 it held in cash at the end of the quarter. The asset sale was forced by virtue of the company's operating cash flow, which saw it use $534,000 last quarter and $1.3 million in the first three months of this year.

No such problems for Telstra, whose annual profit last year was north of $4 billion. It dips its foot into the burgeoning wireless LAN market at a reasonable price.

"This strategic investment demonstrates Telstra's leadership and commitment to providing Australians with improved access to the online environment, convenience and improved productivity," David Thodey, Telstra mobile group managing director said in a statement to the stock exchange.

Perhaps more importantly, it flags the incumbent's interest in the sector.

Jonathan Soon, CEO of SkyNetGlobal, said the agreement would have no effect on customers using the service. Indeed, if anything they can be even more assured.

The deal is subject to the approval of SkyNetGlobal shareholders, but is a sign the market for 802.11 hotspots is gaining credibility amongst large telcos. In recent times BT in the UK has announced plans to deploy 4,000 hotspots, and Softbank has announced that it will rollout 4,000 more next to Big Macs in McDonalds restaurants around Japan.

Reprinted from

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