Telstra's WiFi payphone provider scores $2.3m funding

Stuart Corner
Monday, 05 September 2011 11:18

IT Industry - Listed Tech

PieNETWORKS (ASX: PIE), the Perth based developer of WiFi enabled Internet kiosks/payphones chosen by Telstra for large scale rollout has secured an additional $2.3m of funding via a share placement.

The funding was sorely needed: the company appeared significantly under-capitalised to fulfil what has the potential to be a very large contract and which is still being negotiated.

Last week PieNETWORKS reported a $3.36m loss for the year to 30 June on revenues of $0.805m, compared to a loss in FY10 of $2.01m on revenues of $0.695m. It ended the year with cash reserves of $1.42m having raised $3.15m from a share issue during the year. It raised $3.86m in FY10.

Telstra deployed 50 of PieNETWORKS' Hotspot Webphones during its evaluation of the product and while no indication has been given of the size of future orders, it could be significant. PieNETWORKS points to the increasing tendency of telcos to rollout hotspots for 3G data offload as indicative of the potential for the product.

pieNETWORKS announced today that it had reached agreement for a placement of 145 million new shares at 1.6 cents per share to institutional and other sophisticated investors to raise approximately $2.3m.

It said the funds raised would be used in the ongoing commercialisation of the Hotspot Webphone, including business development activities in Australia and in international markets. Managing director, Campbell Smith said, "The placement will allow the company to concentrate on the job at hand, building upon the significant achievements announced in recent months."

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