Telstra Acquires SkyNetGlobal Hotspots

Telstra Corp and SkyNetGlobal Limited today announced two agreements that
will see the startup sell its network of wireless hotspots, while beginning a
relationship that will allow them to sell services on top of Telstra’s newly
minted infrastructure.

For the cash-strapped SkyNetGlobal it buys the firm more time. A few weeks
ago, the company raised around $370,000 through a rights issue, which was in
addition to the $469,000 it held in cash at the end of the quarter. The asset
sale was forced by virtue of the company’s operating cash flow, which saw it use
$534,000 last quarter and $1.3 million in the first three months of this

No such problems for Telstra, whose annual profit last year was north of $4
billion. It dips its foot into the burgeoning wireless LAN market at a
reasonable price.

“This strategic investment demonstrates Telstra’s leadership and commitment
to providing Australians with improved access to the online environment,
convenience and improved productivity,” David Thodey, Telstra mobile group
managing director said in a statement to the stock exchange.

Perhaps more importantly, it flags the incumbent’s interest in the

Jonathan Soon, CEO of SkyNetGlobal, said the agreement would have no effect
on customers using the service. Indeed, if anything they can be even more

The deal is subject to the approval of SkyNetGlobal shareholders, but is a
sign the market for 802.11 hotspots is gaining credibility amongst large telcos.
In recent times BT in the UK has announced plans to deploy 4,000 hotspots, and
Softbank has announced that it will rollout 4,000 more next to Big Macs in
McDonalds restaurants around Japan.

Reprinted from

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