Telstra, KPN plan satellite joint venture

Dutch telecommunications company Royal KPN NV has agreed to form a joint venture with Australian telecommunications carrier Telstra, merging their respective mobile satellite communications businesses. The joint venture company will take the name of KPN's existing satellite communications subsidiary, Station 12, the companies said in a statement on Monday.

"This means we can lower our tariffs for our customers and invest more in new developments," said Charles ven der Mee, director of communications and public relations at Station 12.

Station 12 has, in fact, been in business for a couple of years, working as a specialised business unit within KPN. Now, the merger with Telstra means that Station 12 will become its own company. Its customers are offshore companies, mining industries, transport companies, aid and international organisations such as the United Nations, said ven der Mee. Station 12 provides satellite communications and networks to these customers.

"We can now focus our strategy better, operate on a worldwide basis and expect a faster growth and bigger market share," said ven der Mee, who said the company's current market share is 24 percent.

Station 12, with some 380 employees after the merger, is headquartered in the Hague in the Netherlands, but has offices in two other locations in the country, as well as in three cities in Australia.

"We are working with around 200 business partners to cover the rest of the world," said ven der Mee.

Meanwhile, Telstra has already started to expand into Asia. In April, the company announced a major alliance with Hong Kong Internet investment company Pacific Century CyberWorks (PCCW), under which the companies plan to form a number of joint ventures. Telstra will invest $3 billion in PCCW and plans to inject both cash and assets into the new mobile telecom ventures.

Telstra and KPN will contribute a combined US$145 million to the venture, which has projected initial annual revenue in the region of $250 million, according to the statement.

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