UPDATE: iiNet to announce 'potential acquisition'
The sale of TransACT to iiNet, expected to be confirmed later today or early next week, would be a win for all parties, telecommunications analyst Paul Budde said yesterday.
It would give Canberra customers a viable network which could compete with Telstra and Optus and with the ability to upgrade and expand.
''For all parties it is win, win, win,'' he said.
Shares in iiNet remain in a trading halt as negotiations with TransACT continue. Sources close to the deal believe bundling agreements between TransACT and ActewAGL would be honoured by ActewAGL if iiNet buys TransACT.
The future of sponsorships by TransACT is less clear. Its major sponsorship is with the Canberra Capitals, who compete in the Women's National Basketball League. TransACT's sponsorship also provides support to schools, community groups and local organisations with services in kind, funding or promotional items to help with fund-raising.
TransACT was established under Kate Carnell's Liberal government in the late 1990s when major telecommunications companies Telstra and Optus were duplicating modern networks in major state capitals and ignoring Canberra. Supporters of TransACT yesterday said that despite a negative return on investment, the venture left Canberra with more than $200 million worth of infrastructure it would otherwise not have.
Mr Budde said TransACT had done a fantastic job, initially giving Canberra one of the world's first high-speed networks. But circumstances had changed. TransACT would need far more capital to compete in a national market and iiNet had to grow to compete with Telstra and Optus.
So the likely sale was a good fit for both. Because of its relatively small size, TransACT had been unable to do a deal with Foxtel.
''If you have a national footprint with a million customers you can talk a different language to those bullies,'' Mr Budde said.
It was likely iiNet would offer more competitive prices and would offer a good deal to customers in the ACT and country Victoria.
Chief architect of the TransACT network Robin Eckermann said yesterday it was the greatest chapter of his professional career. ''In many ways it was a micro version of the National Broadband Network many years before it was conceived ... It is good to see TransACT has survived the 10 years since I extricated myself from it,'' Mr Eckermann said.
Though it was good to have some form of community ownership, ''ultimately you cannot be too attached to such things''.
TransACT's biggest shareholder is Hong Kong-based TVG private equity group, which has a 35 per cent holding. Actew, an ACT government-owned corporation, has an 18.6 per cent shareholding worth about $4.7 million. TransACT's value has been estimated at about $26million. ACT Treasurer Andrew Barr said shareholders had been kept informed about the progress of the sale. In June, TransACT announced it would be a retail service provider for the national broadband network. Industry sources are divided over whether iiNet would do a deal with NBN, allowing it to operate on what is now the TransACT network. This would possibly include an expansion of that network into the areas of Canberra not served by fibre optic cable.
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