We wont bargain hunt say Australian telcos

Despite share prices for many telcos falling to prices that many companies considered to be a bargain the Australian telcos have committed to continue with the original strategies.

ABN Amro telecommunications equities analyst, Ian Martin, said “I don’t see the pricing of the market as an issue.” He went on to say that the cost of providing high speed broadband access has been driving many in the telco industry to consolidate for quite a while but market prices will not cause this to get increase.

The national broadband network would instead be the biggest factor for any further consolidation in the market, Martin said “Once we know the form and structure of the NBN, that’s going to be a catalyst for change,”

Any actions until then would be stopped and not increased by the current market conditions, which includes limited equity availability. “I think for the moment its heads down, consolidate your cash.” Said Martin.

Many industry players shared Martin’s view that acquisitions would not be driven by the market prices. A spokesperson for Internode said that the company was always in search of new companies to acquire that would fit in with its business make-up. They advised “Friday’s share price changes don’t change [Internode's] interest, don’t make it any more acute.”

The spokesperson also added that Internodes key decisions were not made on the price of the companies as many companies have come to realise that the integration of newly acquired business would “cost an arm and a leg” after buying them. Therefore internodes primary goal was to ensure that newly acquired businesses were relatively easy to integrate and would complement Internode.

Greg Bader, the iiNet chief technology officer advised that in the past it was publicly mention that the company would be looking for new business acquisitions, but declined to comment any further. John Linton the chief executive for Exetel said “We have no money to buy anybody and we’re not thinking of selling to anybody. We make a profit and we’re run very conservatively, so I don’t think we’ll be screaming for the exits.”