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Monday, 23 June 2008 07:13

People Telecom to be multi cellular network MVNO

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People Telecom, which as relied on reselling Optus for the mobile services component of its portfolio for the past six years, will switch to taking its Optus services through Optus wholesaler, M2 Telecommunications in preparation for offering services from other carriers.

Under the agreement People Telecom will continue to offer Optus 3G & GSM mobile and Wireless2Go wireless broadband services to existing and new customers. People Telecom CEO, John Stanton, said the agreement with M2 "provides stronger operating margins for People Telecom's existing mobile business, which will assist our earnings growth [and] paves the way for People Telecom to become a multinetwork mobile virtual network operator (MVNO) – offering our customers the flexibility to operate on a range of different major mobile networks across Australia."

He said that further announcements would be made in coming weeks. However, iTWire understand that deals have already been struck with Telstra for 2G services and with Vodafone for 2G and 3G services.

Stanton, told iTWire that, as an MVNO, the company would able to simply buy airtime minutes from M2 and network operators and develop its own packages and plans: under its present deal with Optus it is limited to reselling Optus plans. Existing People customers on the Optus network will be served via the new M2 deal once People's contract with Optus expires.

People Telecom renewed its five year GSM resale deal with Optus in January 2007  for 18 months and expanded it to include 3G voice and data services which it launched in October 2007. However apart from offering the Blackberry on the Vodafone network this deal precluded it from offering services from other mobile carriers.

M2 said its deal with People Telecom was valued at a minimum of $9 million over two years and "marks another significant milestone in M2's rapidly expanding M2 Wholesale business, in terms of both the sizable monetary value and the strategic significance of the alliance, given People Telecom's established standing in the Australian telecommunications industry, particularly in the small and medium business markets."

When People announced its deal with Optus in January 207 it was flagged as a $21m deal, a figure which Stanton said was "an extrapolation of our current spend with Optus over the life of the contract."

According to M2, the agreement to supply mobile services to People Telecom represents one of the numerous customer additions by M2 Wholesale following M2's acquisition of Unitel Australia Pty Ltd from Commander Communications in February 2008


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