Highway 1 broadens its base

INTERNET service provider Highway 1 Internet Solutions has continued its aggressive campaign to buy smaller tech companies nationwide.

At the start of January, Perth-based Highway 1 bought the assets of web hosting and development company Apiix and its sister company, voice over internet protocol (VoIP) outfit Simtex, for less than $1 million from Osborne Park-based Intek, which is refocusing on corporate IT services and divesting its online assets.

The company’s general manager, Nicholas Power, said the purchase, which has doubled Highway 1’s web-hosting customer base to 1,600 business clients, was part of a pronounced growth strategy.

“We’ve been growing Highway 1 for a little while and we’ve found acquisitions are the way to do that, not dissimilar to iiNet but on a much smaller scale,” Mr Power told WA Business News.

“Effectively what we call ‘micro-acquisitions’ for sub-half-a-million-dollar companies.

“And we’ve been subsequently gobbling up little companies, and there’s quite a significant list, most of them are smaller hosting.”

Highway 1 plans to grow the Simtex business, which was previously Highway 1’s VoIP wholesaler, to become a national service offering soft PBX services.

Mr Power said Apiix and Simtex were much larger acquisitions for Highway 1, which currently turns over less than $10 million annually having been bought by managed services company Zettaserve (currently turning over about $30 million per annum) for “some millions” in late 2007.

“We want to get to 10,000-15,000 broadband clients by the end of this year,” he said.

Mr Power said he would begin planning a branding strategy for both Apiix and Simtex, leveraging off Highway 1’s national network.

Meanwhile, listed ISP EFTel this week reported a $983,000 loss for the six months to December 31 on reduced revenue (down 3.35 per cent to $18.3 million). This is an improvement on the previous corresponding period’s $1.7 million loss.