AAPT & PowerTel get closer

Stuart Corner
Friday, 03 November 2006 04:27

IT Industry - Deals

PowerTel is to provide access services, primarily ADSL2+, for AAPT to enable it to reach residential and business customers, and the two companies have flagged a possible integration of the two companies.
AAPT has long been know to have been unhappy with Telstra's wholesale prices for access. However it is not able to dispense with these entirely and announced that, separately, it had reached a new 24 month supply agreement with Telstra regarding network and carrier services.

"Telstra Wholesale remains a key supplier to AAPT and it is an important milestone for us to now have stability and certainty in the relationship for the period ahead," Marko Bogoievski, CFO of AAPT's parent company, Telecom New Zealand, said.

Also there are unlikely to be significant benefits from the new PowerTel deal in the current financial year. In its  Q1 results, announced the same day, Telecom NZ said: "The timeline for migrating certain access services to the new PowerTel arrangement is presently uncertain and as such, limited direct financial benefits are anticipated in the 2006-07 financial year."

Announcing the wholesale deal, PowerTel said: "In a move that many see as the beginning of rationalisation in the Australian telecommunications industry, the deal has opened the door on continuing discussions about further expansion and rationalisation between the two companies."

Bogoievski concurred, saying that the enhanced access services agreement was the start of a broader relationship between the two groups. "Both AAPT and PowerTel believe there is significant merit in developing options to collaborate further in the Australian market and there is a commitment on both sides to examine deeper levels of integration between our network and service layers. We have an open mind about how those options might look."

PowerTel managing director, Paul Broad said AAPT, had agreed to purchase a number of products from PowerTel, including its ADSL2+ service, announced earlier this week.

Bogoievski said: "PowerTel has been investing aggressively in high-speed broadband services." However the bulk of the DSLAMs on which PowerTel's ADSL2+ services are delivered are owned by iiNet in which PowerTel has a 14.9 percent stake.