While there must be some debate about whether Australia needs yet another telco, Uecomm has decided we probably do, and has backed its decision with $A10 million in cash and about $A4.3 million worth of services. The investment will give Uecomm a 19.9 per cent stake in Victorian telecommunications services provider People Telecom, which is also backed by high-profile Victorian businessman Ron Walker and his OneBank venture, the f2 arm of John Fairfax Holdings and Village Online Investments.
Keith Ondarchie, COE of Uecomm, said that the investment makes sound business sense for his company since People Telecom provides voice, data and wireless products to residential customers and SMEs, which is a market Uecomm doesn't target. The company currently provides a range of domestic and international services to its clients, including local, national and international fixed wire services; mobile services, including WAP and content provision; and both dial-up and permanent Internet connection.
In the wake of the investment Uecomm will become the wholesale services provider for People Telecom, and by offloading its low-end sales and marketing to People Telecom, Uecomm will be able to focus on its core business of providing fibre optic network services to the large corporate and carrier markets, Ondarchie said.
"The opportunities afforded by the joining of these two organisations are significant", he added. "We provide the network and infrastructure whist they provide us with a greater network load factor and the access to an established and proven sales and customer management capability, which will save us many thousands of dollars. We are building on each other's strengths."