Nedlands-based communications company Commoditel Ltd has increased its mobile phone contracts, acquiring 20,000 post-paid mobile subscribers from Vodafone Australia for a scrip deal worth $4.5 million.
Nedlands-based communications company Commoditel Ltd has increased its mobile phone contracts, acquiring 20,000 post-paid mobile subscribers from Vodafone Australia for a scrip deal worth $4.5 million.
This move is a part of Commoditel's new strategy of acquiring what it calls "orphan" customer bases and utilising traditional distribution channels to capitalise on them. It represents the first time the company has branched out from pre-paid mobile services.
The full text of a company announcement is pasted below
Commoditel Ltd (ASX:CMO) today announced its debut in post-paid mobile phone services with the acquisition of some 20,000 subscribers from Vodafone Australia.
The acquisition immediately upscales Commoditel's customer base and provides revenue to boost its position as an independent Australian Mobile Virtual Network Operator (MVNO). Commoditel's combined pre-paid and post-paid customer bases are expected to generate in excess of $1 million in revenue per month and Commoditel plans to expand this further through customer retention and proactive marketing programs.
"This is a very exciting opportunity for Commoditel and creates the instant scale needed to become a significant independent MVNO in the Australian mobile market," said Managing Director, Mr David Sweet.
"Our goal is to build a profitable and long term MVNO business in Australia and we are well on the way to achieving this goal. The new post-paid customer base combined with our existing pre-paid business means we are one of only a few independent MVNOs that can provide both services to the Australian market. This is a significant advantage for the business," he said.
Commoditel acquired its pre-paid customer base from AAPT in December 2005 and has consolidated and grown the base since then, with the release of the new "Just" prepaid product.
The company's progression into the traditional field of mobile billing services further demonstrates Commoditel's commitment to building a significant and sustainable MVNO in Australia.
A $4.5 million capital raising is associated with the acquisition, with the funds allocated towards the purchase of the business, repaying debt and marketing activities. The capital raising has been managed by Cygnet Capital Pty Ltd, specialists in small company funding, who also will be appointed Corporate Advisers to Commoditel.
The funding package is comprised of a $2 million share placement to sophisticated investors and a $2.5 million redeemable convertible ($0.01) note issue to sophisticated investors, with a $1.75m subscription by Geoff Lord's Belgravia Group and a $400,000 subscription from Perth based investor, Craig Burton. The balance of the convertible note has been placed with an institutional investor.
The $2 million share placement has been priced at 0.7 cents per share. 73,600,000 shares have been placed using the Company's 15% capacity, raising $515,200. The balance of 212,400,000 shares which are already committed, are subject to shareholder approval at the forthcoming Annual General Meeting.
The funds raised pursuant to the redeemable convertible note issue are convertible into shares and the notes and the conversion is also subject to shareholder approval.
The notice of the Annual General Meeting will be dispatched shortly.
The Commoditel Board will continue to assess opportunities to acquire and consolidate mobile customer bases within Australia as well as evaluate emerging technologies that could supplement Commoditel's business.
