Access Providers acquires Saise Telecom

Wireless broadband proponent Access Providers has signed a deal to acquire fellow Melbourne ISP Saise Telecom for $666,000 in cash and 19.8 million shares.

Keith Ondarchie, chief executive at Access Providers, said the acquisition terms also meant Saise would acquire 30 percent of Access Providers.

"The two key directors [of Saise] will also be joining Access Providers," he said.

Ondarchie said the deal would help boost Access Providers' reach, particularly in its home location of Melbourne. Saise had 24 full time staff in its Melbourne office and one in Sydney. It also had six or seven part time employees, he said.

Access Providers would turn its attention to building a stronger Sydney business, he added.

No rationalisation of staff was expected. Over time, Access Providers was growing its business and would need more channel partners, Ondarchie said.

"There's about 10 percent [overlap with] channel partners that Access Providers has. But the channel partners we have only buy services from us that are data-related.

"So if we put all the channel together -- probably under the Saise brand -- that will give us the ability to sell them [those services]," Ondarchie said.

Graeme Kelly, director at Saise Telecom, said the smaller ISP was channel-focused. Access Providers was acquiring Saise's 700 to 800 channel partners in the deal, he said.

"There will be a two-tier structure. Service providers selling wholesale implementations, agents and resellers," Kelly said.

He maintained that Saise had wanted to "consolidate" with another telecommunications provider. The smaller ISP had been performing "very tolerably", Kelly said.

Neither Kelly nor Ondarchie would give revenue figures for Saise.

However, Ondarchie said Access Providers had turned over $4 million in the last financial year, including a net profit after tax of $926,000. The 2005-06 financial year following the Saise acquisition was tipped to earn $12 million to $13 million in revenue.

"And we are paying tax," Ondarchie said.

He said the company would migrate Saise customers onto its wireless broadband network within six months and introduce voice-over-wireless services to them when that was launched later this year.

Ondarchie said the merged company would have a good base of business customers, diversified revenue and sales and marketing expertise to help it grow in other states than Victoria.

Access Providers would offer a suite of voice, mobile and data products, IT consultancy and network integration post-acquisition, he said.

Having a wireless broadband network gave the company a competitive edge over local loop providers channelling large amounts of investment capital into upgrading their networks for voice, data and video, Ondarchie said.