Commander To Go Hunting As Telecoms Consolidate

Sydney Morning Herald

Friday November 24, 2006

Matt O'Sullivan

COMMANDER Communications says it plans to reinforce its reputation as a predator in the telecom sector by taking advantage of industry consolidation.

Shares in the former Telstra subsidiary rose more than 3 per cent to almost a seven-month high yesterday after it reiterated forecasts for full year earnings before interest, tax, depreciation and amortisation of between $95 million and $101 million. The stock closed up 7c at $2.27.

Chief executive Adrian Coote told shareholders that the telecom was intent on expanding via organic growth as well as by acquisition opportunities that would be thrown up by consolidation in the industry.

"[But] we don't just buy anything," he said at the annual meeting in Sydney yesterday.

The former subsidiary of Telstra has "head-room for acquisitions", thanks to a $340 million funding facility put in place last year.

"The biggest opportunities in the market today are in Australia [although] that doesn't preclude us from going outside," Mr Coote said.

"But if you consider that small business consumes $2 billion worth of services and we are a service provider company, then there is an enormous amount of market to service here.

"We certainly wouldn't be going overseas for some time."

Commander was itself the subject of speculation last week that Singapore Telecommunications was circling, after the stock surged on heavy trading volumes.

But the trades turned out to be institutional investors rejigging their holdings.

In April the junior telecom completed a takeover of tech stock Volante for more than $130 million - its fourth acquisition since it bought IT services company Centari in 2002.

The company provides data, voice and information technology services and high-speed wireless broadband. Mr Coote said consolidation was most likely in the mobile phone sector where Optus, Hutchison, Telstra and Vodafone were competing vigorously.

"Everyone is talking about [consolidation] and, if everyone is talking, something is going to happen," he said.

Meanwhile, a former regulatory chief at Telstra, Bill Scales, was re-elected to Commander's board, as was chairwoman Elizabeth Nosworthy, a 10-year veteran of the incumbent telecom's board.

© 2006 Sydney Morning Herald

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