OzEmail sale to fetch fair price: analyst

OzEmail says the bankruptcy of its US parent WorldCom has had little effect on its operations, but this won't stop the company from being sold, according to one telecommunications analyst.

"I think OzEmail will be sold. However, as this is a reasonably successful company with quite a few suitors I don't expect a fire sale," said telco analyst Paul Budde. "It will be a fair price be it on the low end of that," he added.

WorldCom purchased OzEmail in 1998 for $520 million. However, the value of the company today has been rumoured to be nowhere near that mark.

New sign-ups have remained constant over the last few months, according to WorldCom Asia Pacific spokesperson Rowena Kwok, and the ISP this week began rolling out its new OzEdsl broadband service around Australia.

Budde said OzEmail has always been able to operate fairly independent from WorldCom and this is also reflected in the fact that the company was never incorporated in UUNet [WorldCom subsidiary] nor WorldCom. "It has been (even on an international WorldCom level) the odd one out.

"That has, luckily, become the reason why the company at present has a very good chance to continue to be the successful competition story in the Australian ISP market," he said.

Asked if she could give any assurances OzEmail would not change hands, Ms Kwok said "Neither WorldCom nor OzEmail are in liquidation nor contemplating it any time soon. OzEmail is a profitable business and our customers are not leaving us at all."

OzEmail is Australia's second largest ISP behind Telstra BigPond, with an estimated 600,000 dial-up subscribers.

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Steven Deare

PC World
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