Stuart Corner
Tuesday, 28 November 2006 09:54
IT Industry -
Deals
Page 1 of 2
Cash-strapped Powerlan (ASX: PWR) is to seek additional funding to exploit what it believes to be significant potential in the telco OSS/BSS market for its subsidiary, Clarity International.
Chairman Ian Campbell told the company's AGM that Clarity "could grow to be a key supplier to a $10 billion to $20 billion worldwide market for OSS for telcos," and he noted that "this market is currently serviced by many smaller supplies and is beginning to consolidate."
Campbell said that telcos were "buying OSS systems like never before." This spending spree is driven by their attempts to merge silos of legacy systems into a single homogenous whole that enables new services and products to be quickly and easily developed and rolled out. Telstra's moves to rational over 1000 IT systems used in its operations by 80 percent is typical of the trend.
During the past year Campbell said that Powerlan's limited investment resources had been directed to Clarity rather than at other subsidiaries in recognition of its prospects. "However in order to reach its potential, we have concluded that clarity needs more capital than Powerlan can provide, with the current approach of funding by cashflow likely to lead to a lower growth in shareholder value than might be achieved if a more concerted effort to raise funds for Clarity was employed."
He added "the precise form of additional funding remains to be decided, and the board is dedicating considerable resources to determining the correct quantum of funds and preferred course of action. Further announcements will be made when we have determined how and when new funds will be raised.
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