The Government has offered Australia's three mobile operators, and vividwireless, renewal of their existing spectrum allocated on 15 year licences in the late 90s and early 2000s at set prices, while the Government expects to rake in $3 billion.
Video over Internet provider, ReelTime Media (ASX: RMA), looks like it has become a takeover target with the company saying it has had approaches from people wanting to take up more than the 15 percent equity currently on offer.
ReelTime suspended trading of its shares on the ASX on 20 February 2006 to undertake a placement of capital against equity. It now says that a number of parties, including international companies have "expressed an interest in acquiring a substantial interest in ReelTime which may possibly extend beyond the 15 percent equity currently available."
Discussions are continuing and if necessary a proposal will be referred to shareholders for vote at an EGM. In the meantime the company intend to keeps its shares suspended from trading.
In April 2006, the company raised $4 million in an IPO that was heavily oversubscribed and, as a result, promptly raised a further $1 million. However the costs of building up it service offering have taken their toll and for the quarter ended 31 December 2006 the company reported cash reserves of just $795,000 after burning through twice this amount in the quarter.
ReelTime has agreements with major Hollywood and niche studios for distribution of commercial content over secure broadband networks. Its 'white label' service is delivered the Australian broadband network, and is available for resale to any ISP, telco etc. The company says it aims to reach 0.5 percent of the $1 billion DVD rental market within 18-24 months which would be breakeven point. To date the take up rate from visitors to its website has been around 4.5 percent.
David Bass
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