M2 Communications invests in Inabox Group

Wholesale telecommunications provider and Telstra partner Inabox Group has delayed its IPO due to challenging market conditions and following a $2 million investment from supplier M2 Communications.

The virtual telco onsells capacity from Telstra, Optus and AAPT to retailers via its Telcoinabox business, and was due to list on June 26.

Inabox issued a statement last week delaying the listing, saying it hoped a new offer closing date would attract additional investors.

M2's investment will see it hold around 12 per cent of the listed company.

Telcoinabox competes with MyNetPhone and ispONE, and was originally seeking to raise $2.9 million.

It said the money would be used to help Telcoinabox expand into new markets and complete the acquisition of telecommunications wholesale aggregator iVox. It also highlighted a strategy to acquire smaller wholesalers and aggregators, or other complementary businesses. 

iTnews understands Telcoinabox was considering a play for ispONE, before the ISP lost a court case against Kogan Mobile for suspending and blocking a number of Kogan Mobile customers over several months for what it claimed was overuse.

The Victorian Supreme Court found ispONE had breached its obligations under the pair’s master wholesale agreement, and ordered it to pay Kogan's losses and court costs.

Inabox generated revenue of $45.7 million last year, and profit after tax of  $1 million in the first half of 2013. It recently appointed well-known advertising executive Siimon Reynolds as chairman.

M2 recently acquired internet service providers Dodo and Eftel, and last traded at $5.91.