New Tel announces new deal

PERTH telco New Tel Ltd has made its second acquisition in a month, agreeing to buy one of its major mobile phone dealers.

The company will pay the owners of Delta Phones Pty Ltd $4 million via a convertible note, with up to another $1 mill-ion payable in New Tel ordinary shares as a performance incentive.

The note may be converted into shares any time between September 9 2002 and December 26 2003, with the number of shares to be issued to be determined by the closing price on the day prior to the conversion notice being received by the company, up to a maximum of 17.8 million shares.

The performance incentives are based on the number of net mobile phone activations achieved in three years, with the number of shares to be issued to be determined by the closing price at the end of that period.

New Tel’s purchase of Delta follows its recent $50 million acquisition of Digiplus Investments Ltd, a phone call reseller. New Tel said its Delta acquisition consolidated the company’s mobile phone marketing program into one division with a strong retail presence and would decrease customer acquisition costs.

New Tel managing director and CEO Peter Malone said Delta’s customer loyalty programs and its ability to secure and retain clients made it an attractive proposition.

Once all arrangements are completed, Delta’s programs will be central to New Tel’s expanded mobile telephony division and are expected to decrease its customer acquisition costs.

New Tel will rebrand Delta’s 30 retail outlets in Victoria and New South Wales as New Tel shops, and intends to establish a retail presence in all national capital cities.