IIN - iiNet Limited

I hope no one lost a lot of money????

Re: Do we buy IINET?

hayden123 said:

YAY or NAY?
The price seems alittle low .80cents for a company with over 600,000 subscribers

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Long term, probably YAY. But (and ISP is an industry I know well) at that size there are some pretty large logistical and technical challenges.

Technologies change relatively quickly. and most ISP's do a pretty terrible job of billing and customer support. AT this depressed price, its harder for them to raise capital by issuing shares because there will be a greater dilution (ie 1,000,000 shares issues at $3 would require 3.75 million shares to be issued at 80c.

Technology changes fast. Wireless technologies like Wifi and Iburst chip away. Broadband over power is being triallied in various places.

Technology also becomes commoditised. Ie pretty much anybody can build a broadband network is they have the cash. DLSAM rollouts are not unique to iinet.

Their buyers powertel and amnet have some good assets. Fibre in the ground to me is a great thing. You can change the devices and technologies used across each fibre and it will be there in the coming years. I feel that there is more equity value in a fibre network than DSLAMS for example as in 3 years from now you may find the DSLAMS they used are no longer leading edge.

So I think its good now that iinet potentially has access to fibre backhaul at a more competitive rate.

What I am pondering though is to buy Amnet, or Amnets 50% owner Futuris, as then you get ISP exposure but some other diversification as well..

http://australianit.news.com.au/articles/0,7204,19851560%5E15306%5E%5Enbv%5E,00.html

iiNet retreats from NZ
Staff writers
JULY 20, 2006

Perth-based ISP iiNet has put is its New Zealand business iHug on the market, the company's executive chairman Peter Harley has announced.

In a statement released to the market today, iiNet said that it wanted to focus on developing its Australian business.

The company is looking for a cash sale to fund further infrastructure investment in the Australian market, Mr Harley said. Part of the proceeds would be used to reduce the company's debt to Westpac.

Mr Harley said that the board had conducted a strategic review of the business and concluded that the New Zealand operation "was outside this key focus of activity".

The ISP is yet to secure a buyer for the business but said that it would contact potential buyers this month ahead of a sale which was expected to be completed before the end of the year.

Mr Harley declined to reveal who had approached iiNet to buy iHug but he said that the offers had come from industry and private equity business both within Australia and offshore.

iiNet said company chose to sell the business after it received "a large number of unsolicited approaches to purchase (the ISP)".

iiNet's New Zealand operation currently has around 120,000 internet subscribers and recorded and EBITDA profit of $5.7 million last financial year.

The New Zealand government's decision last May to change its telecommunications regulations would assist the sale, Mr Harley said.

"Since then there's has been considerable interest in iHug and we have taken the view that this is a good time to exit the New Zealand market and focus attention firmly on growing our Australian business," Mr Harley said.

Mr Harley conceded however that that it was not clear when the New Zealand government new regulations would be implemented.

iiNet sells ihug to Vodafone NZ for $36m
9-October-06 by AAP & Andrew Hobbs

http://www.wabusinessnews.com.au/en-story.php?/1/44114/iiNet-sells-ihug-to-Vodafone-NZ-for-36m

Perth-based internet service provider iiNet Ltd has successfully sold its New Zealand subsidiary ihug Ltd to Vodafone New Zealand for $36 million, an amount it claims was around $6 million above book value.

News that iiNet was considering the sale was first mooted in WA Business News in May, though iiNet didn't formally announce plans to sell the company until July this year, stating part of the proceeds would be used to reduce group debt, after the company suffered a net loss of $60 million for the 2005-06 financial year.

ihug, which is New Zealand's third largest ISP, cost iiNet $30.1 million in cash and a further 23.7 million shares when it bought the company in 2003 - though that purchase included a big boost to iiNet's presence on the Australian east coast as well as giving it a trans-Tasman foothold.



The full text of a story from the New Zealand Press Association is pasted below, followed by the full text of an iiNet announcement


Mobile operator Vodafone New Zealand said today it is buying ihug for $NZ41 million to broaden its customer base.

Vodafone chief executive Russell Stanners said ihug will operate as a standalone company, and Vodafone would remain focused on mobile.

Vodafone has around 53 per cent of the mobile market, but only 20 per cent of the telecommunications market.

"Ihug already has a strong brand in the ISP (Internet service provider) broadband market which New Zealanders identify with, a capable management team and we fully support their growth plans," Mr Stanners said.

Ihug chief executive Mark Rushworth believed the transition would be smooth, as the two companies have similar brand values.

Ihug is positioning itself to take on Telecom in its home phone market, moving from Internet service provider to telecommunications company following the government's decision in May to open up Telecom's fixed line network to rivals.

Ihug has about 8 per cent of the broadband, or fast Internet, market and expected all its services to be at that level within a year.

Ihug's Australian owner, iiNet, put the business up for sale in July, turning down a $NZ30 million bid from New Zealand ISP Orcon, and understood to have rejected a $NZ36 million bid from Internet rival Compass Communications.

State-owned enterprise Transmission Holdings was understood to be one of two companies left in the hunt to buy the Internet service provider.

Telecommunications analyst Paul Budde said the purchase was a significant development, going beyond the strategy Vodafone had pursued so far of building partnerships with fixed-line based operators to get a better foothold in the market.

"It vindicates a position we have held for many years, that mobile only infrastructure doesn't make any sense," Mr Budde said.

"By being a mobile operator only, you limit yourself to only be able to deliver those services and applications in one particular format."

Broadband was the future for fixed and mobile services, and ihug was a "clear leader" in that field, Mr Budde said.

"I am sure that all eyes of the larger Vodafone organisation will be on New Zealand to follow what the outcome of the merger will be."

New 4G -- fourth generation -- technologies were around the corner, expected to allow two-way communication in voice, video and data on a scale that was previously impossible. The 4G technology would allow mobile users on the go to enjoy services that they can now get through personal computers with high-speed broadband connections.


The full text of an iiNet announcement is pasted below

iiNet is pleased to announce the sale of 100 per cent of the shares in its New Zealand subsidiary, ihug Ltd, to Vodafone New Zealand Ltd. The sale price of $36 million, is approximately $6 million in excess of book value. It is expected that completion of the sale will occur within two weeks.

iiNet acquired the Australian and New Zealand operations of ihug in 2003, and announced in July that following a strategic review of the Group, a desire to focus on the core Australia business, as well as unsolicited offers being received for ihug following recent changes in the New Zealand regulatory environment, a process would commence for the sale of ihug in New Zealand.

"We expected the sale process to be complete this half," said iiNet Chairman Mr Peter Harley. "We're pleased that a fair price has been made by Vodafone, delivering a good, clean result for iiNet shareholders."

The funds realized from the sale will be applied to a reduction of bank debt and for working capital to continue the expansion of the business in Australia.

"ihug staff are expected to be retained by the purchaser and will continue to grow the business," said iiNet CEO Mr Michael Malone.

"It has been a pleasure to work with the ihug team over the past three years," said Mr Malone. "I believe that we have transformed the ihug business during that time, leaving it in a strong position for customers, staff and the new owners."

"iiNet will also retain its own Call Centre in Auckland, which employs approximately one hundred people. There is a five hour time difference between Perth and Auckland, and a very similar operating environment, making it an excellent place for us to maintain a presence."

"It will be a little sad to say goodbye to the ihug staff, but I'm delighted that the iiNet Call Centre team in Auckland will remain with us, and continue to be an important part of the iiNet story."

In a move that could be amusing to the fundamentalists as well as the chartists amongst you, I bought IIN recently (before the ihug NZ sale) because I have a number of friends who work for them and said they're worth buying.

I'm surprised none of you seem very interested in IIN. They appear to be establishing a nice upward trend and have touched $1 today.

Looking good at the moment.

More importantly, are your mates still buying at these prices?

Kremmen said:

I'm surprised none of you seem very interested in IIN. They appear to be establishing a nice upward trend and have touched $1 today.

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I bought mine at $0.65 and am still holding them.

chansw said:

I bought mine at $0.65 and am still holding them.

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Nicely done! I didn't have the guts to get in until they had started showing signs of having come off the bottom, so I started buying at 73c.

I'm looking at this stock on paper atm, very strong over the past 2 weeks.

up 30% since I first looked at it.

After the trouble with their accounting practices that caused the drop in SP last year I feel Malone and iinet will be back on top this year.

I like the fundamentals of the company, they have moved away from Telstra backhaul to the exchanges by purchasing dark fibre from PIPE Networks (PWK)

Unlike a lot of other ISP's they ensured they bought mutliple cores from PIPE between each exchange to future proof capacity and scaling issues. Their exchange rollout has been impressive and I think they may be a good aquisition target...particularly with Powertel having a 19% stake in them...and with Powertel about to be bought out by NZ telecom.

tayser said:

I'm looking at this stock on paper atm, very strong over the past 2 weeks.

up 30% since I first looked at it.

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That is probably due to the takeover of PowerTel by Telecom New Zealand and the speculation of more consolidation within the telecommunication sector. I agree with Tomcat that iiNet has good fundamentals. The following is from The Age today

"Mr Broad would not comment on possible acquisition prospects such as iiNet or Macquarie Telecom, in which Powertel already holds stakes."

Merged Telecom, PowerTel must grow: CEO
February 4, 2007 - 2:14PM
http://www.theage.com.au/news/Business/Merged-Telecom-PowerTel-must-grow-CEO/2007/02/04/1170523949227.html

A merged Telecom Corp of New Zealand and PowerTel would lack the scale to deliver competitive products and would need to grow, PowerTel's head said on Sunday.

Last week Telecom launched a $357 million takeover bid for PowerTel, with which it signed a high-speed broadband deal in November.

According to PowerTel chief executive Paul Broad a merged group would have to grow to compete effectively.

"We need to grow organically and if there are opportunities to grow through M and A (merger and acquisition) activity we would," Mr Broad told Sky News Sunday Business.

"But we have to grow.

"We're not at the scale, we think, that we can deliver competitive products."

Telecom is New Zealand's biggest company and owns Australia's third biggest phone company AAPT.

PowerTel is Australia's third biggest fixed line player.

AAPT pays about $680 million a year to Telstra, and other carriers, to use their telecommunications infrastructure, and stands to benefit from PowerTel's substantial network, which covers about 90 per cent of Sydney and Perth, 80 per cent of Brisbane and 70 per cent of Melbourne and Adelaide.

Apart from becoming no longer reliant on someone else's infrastructure, Mr Broad said achieving scale was one of the main motivators behind the deal for both Telecom and PowerTel.

"Our businesses are sub-scale," Mr Broad said.

"If we don't get big and we don't become competitive then we won't have a business in a few year's time."

Mr Broad would not comment on possible acquisition prospects such as iiNet or Macquarie Telecom, in which Powertel already holds stakes.

"I can't speak for what might happen with other companies."

Mr Broad said offering a mobile phone service, which the merged group would not have, was "very important", and flagged that existing discussions with Hutchison and Vodafone would continue.

"I think you'll find those discussions will evolve to be a bit closer over time.

"Whether that leads to a consolidations play is another question.

"But certainly I think Vodafone and Hutchinson need a land broadband strategy, we need a mobile strategy so .... there's a natural fit there."

Last Friday, after making the PowerTel bid, Telecom shaved its 2007 earnings before interest, tax and amortisation guidance for long-suffering AAPT to $40 million.

That was less optimistic than its last projection in November of a result between $40 million and $50 million, and down on the $75 million forecast three months earlier.

Mr Broad said he was confident of AAPT's future.

"I can't judge or comment on what they might have done in the past, I'm not there.

"All I can say now is that PowerTel's strategy and performance in the last 12 months has been incredibly strong, and we believe the combined group of AAPT and us will be strong."

Mr Broad said both companies would continue to discuss his future at the merged group.

my god I wish I had saved my initial trading capital earlier.

since I've been watching the shares, they've just 40%... and who knows after today:

http://www.theage.com.au/news/Busin...es-Amcom-report/2007/02/08/1170524196017.html

Telecom NZ approaches Amcom: report
February 8, 2007 - 7:14AM


Telecom, which is bidding to take over Sydney-based telco PowerTel, is reported to have made an approach to another Australian telecommunications company.

Telecom was understood to have approached Amcom Telecommunications with a friendly takeover offer of up to $A80 million, The Sydney Morning Herald (SMH) reported on Thursday.

Such a deal could also give Telecom a controlling stake in Perth-based internet company iiNet.

At the end of January Telecom, which already owns Australia's third biggest phone company, AAPT, announced a proposed $A357 million takeover of PowerTel, three months after forging closer ties with the Sydney-based telco in a high-speed broadband deal.

Telecom has now increased its stake in PowerTel to more than 58 per cent, making the prospect of a counterbid highly unlikely.

On Wednesday, a person familiar with Telecom's approach to Amcom told the SMH Telecom had been in talks with Amcom in December about a proposed offer.

"They have unofficially approached Amcom about taking them out," the source said. "(But) it's not a done deal."

Another source close to the parties said that "cutting a deal with Amcom was the only way (for Telecom) to take out iiNet".

Telecom would gain a 36 per cent stake in iiNet through a bid for Amcom, while on completion of its takeover of PowerTel, Telecom would gain a 17 percent holding in iiNet.

Reckon the recent rise has hit its peak?

Just going over a yearly chart and its closed today on a support level which it hit back in March last year which was the turn around before it ultimately hit rock bottom in May.

Thoughts?

In their speeding ticket response they have made mention that their half year results are due on the 19th of Feb. There may be a bit of interest leading up to the release of the results with punters hoping for some positive news.

That and the possibility of NZ telecom owing 18.3% through Powertel and the possibility of acquiring Amcom another 20% ....which could lead them to go all out for IInet may see support at higher levels over the next couple of weeks

This stock has certainly won a few beauty pageants in the past 3 months since I've been watching it.

As of today, up 70%!

I wish I wasn't just paper trading right now!

heh, oops, sounds like I'm ramping it a bit, apologies, that's not the intention. But I still think I've learnt more from watching this stock - and its charts - by reading some of Guppy's texts at the same time - just going through part 3 and 4 in Trend Trading and as I'm re-drawing the trendlines based on updated data, what I'm reading is making a heck of a lot of sense.

IIN

I have been watching IIN run up dramatically since presenting at the Mac Bank micro caps presentation on May 3. Is this sp moving, as a bit of a novice, could someone post there thoughts on what might be going on??

Thanks.

what's going on?
iiN shares jumped from $1.25 to about $2.20 within a few weeks.

is this all to do with the government's fibre-to-the-node policies?

i'm amazed. i was thinking of buying into iiNet a month ago, but never anticipated a jump so high!

quarky said:

what's going on?
iiN shares jumped from $1.25 to about $2.20 within a few weeks.

is this all to do with the government's fibre-to-the-node policies?

i'm amazed. i was thinking of buying into iiNet a month ago, but never anticipated a jump so high!

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I was thinking of IIN 6 months ago Damn if only!
The only reason I can see lately is their big advertising push - Seeing a lot of their ads on tv in the past few weeks, making a lot of mum/dad investors take notice. I'm actually a customer of theirs and have been very impressed with their service but feel it's too late for me to jump onboard.