Clever Communications has confirmed it will give its shareholders cash to the tune of $7.2 million after reaping the rewards of selling its off-net business to M2 Telecommunications.
The capital return will come in two lots: The first, at $0.04 per share, to be paid once approval is gained from shareholders and the second, at $0.02 per share, once the final proceeds from the off-net business sale are received.
“We think it is a smart thing to do, to return the capital to shareholders at this point in time,” Clever Communications (ASX: CVA) managing director, Scott Carter, told Computerworld Australia.
In April, Clever Communications sold its off-net business to M2 Telecommunications (ASX:MTU) business unit, People Telecom, for $5 million in cash.
With the deal, M2 gained Clever’s off-net fixed, mobile, data and virtual private network customer contracts – largely comprised of SMBs.
However, Clever retained its business-grade wireless data service, which Carter said the company will continue to build out.
“We are seeing plenty of demand in the fixed wireless broadband space. The reason being is that a lot of the carriers have slowed down their investment in terrestrial-based Ethernet services, and our products are filling that void for a lot of them,” he said.
“We actually wholesale our products to other major carriers in Australia. We are going to continue expanding our coverage into other major centres such as Perth and Canberra and those types of locations in the short term.”
Carter added that Clever would retain its focus on the business market, and did not see a threat being posed by the National Broadband Network (NBN) rollout.
“The outlook for our business is we will continue to roll out our network and continue to operate separately from the NBN. Reason being is, with the advent of the cloud or infrastructure as a service or whatever we deem to call it now days, there is massive need for true redundancy. A lot of our applications today go to organisations that have both terrestrial and wireless so they have full redundancy in their network,” he said.
“At the end of the day, I think the post-NBN world is going to be won by two people: One is those with very large scale like the TPGs and iiNets… and then there is a space for operators like the Clevers of the world.”
In a statement to the ASX, Clever said the capital reduction would not result in the cancellation of any shares and a general meeting would be called to seek approval for the action.