Phoneware Continues ISP Spree

[Sydney, AUSTRALIA] Phoneware Online has acquired four ISPs previously owned by Channel E – CorpLink, OzRamp,
Seniors On Line, APAC Internet and Ezee Internet – in a move to expand its existing ISP
business.

The acquisition is valued at $750,000 and follow’s Phoneware’s acquisition of ISP Blue Planet in
October this year. It will be paid for with 3 million Phoneware shares.

Channel E is owned by David Koch’s My Money Group and maintains a point of presence (PoP)
in Brisbane, with a further PoP in Sydney scheduled to go live within the next fortnight.

Phoneware Online will use these facilities to offer business services including virtual private
network development, dial-up and permanent Internet connection. The Channel-E ISPs will be
absorbed into Phoneware Online’s existing Lexicon brand whilst maintaining customer services.
Phoneware said the ISPs have been trading profitably for a number of months.

Phoneware told the ASX that aggregation of services and equipment of Channel-E’s ISPs with
those of Lexicon and Blue Planet will enable it to trim the fat from its business model, giving it
freedom to terminate a number of existing connections and supplier contracts which are limiting
profitability of the ISP business.

Phoneware Online will also expand its customer service levels, incorporating in-house
installation and extended customer service hours.

Phoneware Online general manager Paul Dundas, said the deal continues the company’s
strategy of acquiring like-minded businesses that place technology and customer support as a
high priority.

“Channel E’s ISPs have a very stable customer base, with more than half having been members
for longer than two years,” Mr. Dundas said.

My Money Group and Phoneware Online are discussing an ongoing business relationship that
would see Phoneware Online provide carriage services to My Money Group, and My Money
Group provide Phoneware Online with data and information services.