Optus reassures on Alphawest businesses

Optus reassures on Alphawest businesses

Summary: Optus has reassured acquisition target Alphawest it is "very much interested" in its information management arm, allaying the IT service provider's concerns over the outlook for the business under the SingTel-owned carrier's stewardship, a senior Alphawest executive said.

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TOPICS: Telcos, Optus
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Optus has reassured acquisition target Alphawest it is "very much interested" in its information management arm, allaying the IT service provider's concerns over the outlook for the business under the SingTel-owned carrier's stewardship, a senior Alphawest executive said.

Alphawest chief executive officer Garry Henley told banking and finance customers at a seminar last week one of the company's prime concerns in looking for a "partner" was whether prospective acquirers "recognise the three parts of our business". The company's offerings span infrastructure services, business continuity and information management.

Henley specifically nominated the future of the latter as an area of concern for Alphawest's management.

"We asked [Optus], do you value that? Just to buy a business for IP telephony; you're not very far down the track."

The information management business encompasses software-related fields such as document, records and content management.

Optus, however, was "very much interested" in every aspect of Alphawest's business, according to Henley. "So all parts of our business are relevant."

Henley said the proposed AU$25.9 million transaction had been on the agenda for several months and was a calculated move by the carrier to become a force in converged communications.

"This didn't come out of the blue," he said.

"We had our first contact with them [on the proposed takeover] nine months ago."

Alphawest has unanimously recommended its shareholders accept the Optus proposal.

The two companies have had a strong business relationship in recent times, with Alphawest being an Optus IP telephony partner.

Optus' move into converged communications was reflective of greater trends in the telco sector, according to Henley.

"Telcos are struggling with maintaining relevance with their customers," he said, highlighting IP telephony as the main factor behind the shift.

"Optus has a huge customer base, and convergence is coming. It's easier to acquire [in order] to leapfrog [this market]," Henley said.

"They didn't buy us for our AU$150 million revenue, they bought us as a catalyst for their entry into the convergence space."

Similarly, Alphawest had been looking for a partner for some time, according to Henley. The company had "a fairly soft balance sheet" after its management buyout of the Telstra-owned Solution 6 in 2002.

Henly led the buyout after Solution 6 had purchased Alphawest two years prior.

Alphawest had been looking for a partner since that purchase, according to Henley. Like many integrators, it had been caught in the "nightmare" period after the "30-year IT party", he said.

Topics: Telcos, Optus

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  • Singtel Comes Downuder

    Singtel being a Singapore Government organisation owns a computer company called NCS. NCS has been doing alot of work at Optus, now Optus buys an account list to expand where NCS will operate. Is the Singapore Government building a backdoor into Australian business using IT?

    http://www.ncs.com.sg/about/

    Conspiracy theory maybe but I don't think so
    anonymous