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NewSat and Dodo sign $30million deal

  • 04 September, 2007 11:41

<p>NewSat Limited (ASX:NWT) Australia’s leading independent satellite services provider, and Dodo, one of Australia’s best known consumer telcos, have signed a deal in Melbourne which can sharply accelerate affordable connection of broadband internet for remote Australian households and businesses under the Howard Government’s Australian Broadband Guarantee programme.</p>
<p>The new service, scheduled to commence October 07, can deliver the lowest price and best performance benchmark ever in consumer broadband internet satellite connection for remote Australia.</p>
<p>“Dodo Satellite powered by NewSat” will offer a range of seven connection plans, all capped, with a starting price of below $20 per month. This move is set to revolutionise the price of broadband satellite connection in the country by slicing approximately 30 percent from the current starting prices for a 256/64kbps speed connection.</p>
<p>The service will form the basis of an application to the Commonwealth Government’s ABG programme this month and is subject to approval by the Australian Government’s Department of Communications, Information Technology and the Arts.</p>
<p>As part of the new “Dodo Satellite powered by NewSat” alliance Dodo is committed to delivering a minimum target of 12,000 remote customers under ABG budgeted funding to the 30th June, 2008. This exclusive agreement is a landmark endorsement of the “Broadband to the Bush” push.</p>
<p>It is estimated that the contract will be worth $30 million of revenue over the first nine months - to the end of the financial year 07/08 - of the five year life of the contract.</p>
<p>Both parties expect strong continuing uptake of their best price/best performance, remote broadband connectivity by satellite offer and look forward to the Commonwealth Government’s review of the expenditure from the $400 million funding sourced out of the interest from the Telecommunication Fund for the years beyond 08.</p>
<p>In a further show of confidence in the outcomes of the agreement, Dodo Satellite Pty Ltd has also joined the NewSat share registry as a major stock-holder by subscribing to $500,000 of ordinary shares in NewSat Limited, as well as performance based options.</p>
<p>The key to the startling growth of broadband bush connections underlying the new agreement is the investment undertaken by NewSat in “Ku Plus” technology.</p>
<p>This satellite breakthrough involves NewSat introducing to Australia the US-sourced Surf Beam hub and ancillary technology which not only makes rapid deployment of connections possible, but enables the offering of highly desirable price points for consumers as well as delivering enhanced quality of service.</p>
<p>“NewSat’s strategy of maximising its teleport asset base by partnering with a highly effective retail ISP is a case of both partners to the alliance playing to their strengths,” said Mr Adrian Ballintine, CEO of NewSat Limited.</p>
<p>“This company will continue to pitch for business at the big end of town and around the world, but through our partnership with Dodo, NewSat’s services will be aggressively marketed to consumers and small businesses in remote Australia, we now have the best of both worlds.</p>
<p>“The agreement is a major step forward for the strategic development of NewSat. We have world class technical and operational assets and these are being increasingly recognised at both government and international business level.</p>
<p>“The deal with Dodo is a milestone in the growth of the company, opens the door to working with one of Australia’s fastest growing telecommunications retailers, and ensures that we have the justification for the investment in the “Ku Plus” technology which will prove advantageous for our satellite service offering as well as push the boundaries for satellite connection to remote clients in Australia.</p>
<p>“By achieving this landmark agreement NewSat is refreshing the Howard Government’s ABG policy, and will extend our services to health, education and emergency services to remote Australia,” Mr Ballintine said.</p>
<p>“Whilst NewSat participated in the two earlier government funded subsidy schemes its technology was not specifically aimed or priced at consumers and accordingly had little impact on the market. Not surprisingly, our last ABG application was declined, however NewSat is now able, with Dodo as our partner, and the introduction of Ku Plus technology, to submit a new application to the Government which we are confident will be successful,” he said.</p>
<p>Explaining the new technology, Mr Ballintine said, “This is the first time ViaSat’s SurfBeam technology has been deployed in the Australasian region, so it is quite an achievement for NewSat.</p>
<p>“We saw the opportunity to step ahead of the prevailing market technology in Australia and now will be able to deliver the best of breed consumer satellite connection and quality, arguably superior to the existing satellite service in Australia up to now.</p>
<p>“ViaSat’s Surf Beam technology has been tried and tested extensively in the USA and Canada and is the platform of choice there.
“Through NewSat and Dodo, it won’t be long before it is ubiquitous in Australia, too,” he said.</p>
<p>Dodo is a very successful, privately held company run by Managing Director and Founder, Mr Larry Kestelman. Since inception in 2001, Dodo has connected more than 250,000 households and already enjoys a strong presence in regional Australia.</p>
<p>Dodo has an established presence through its aggressive advertising and a large, existing database of bush customers waiting for broadband internet connection. This new agreement with NewSat is a strategic move to ensure Dodo meets its customers’ expectations and continues to expand its services into the remote Australia.</p>
<p>Dodo Managing Director Mr Larry Kestelman said, “Today’s announcement builds on Dodo’s strategy to integrate with Australia’s leading infrastructure partners.</p>
<p>“We already team with Telstra, Uecomm, Powertel, so the satellite partnering with NewSat extends our business model and expands our operations into the outback. Dodo can now offer broadband internet connection, and other telecommunication services, Australia-wide as a result of this joint venture.</p>
<p>“Satellite rounds out our telecommunication product offering with land lines and mobile services.</p>
<p>“The strength of the agreement is that it matches two fast moving Australian technology companies and delivers the best of both worlds. We have NewSat’s strong and robust infrastructure coupled with Dodo’s proven marketing performance.</p>
<p>“Remote Australia will be the winner,” he said.</p>

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