E-Phone secures Voyager internet service

By MICHAEL FOREMAN

E-Phone has picked up Voyager's internet telephony business, now yielding $400,000 a month in revenue, from MCI Worldcom subsidiary Uunet in a cashless transaction.

"No capital sum was involved," said E-Phone chief executive officer Bob Barraket.

"We have taken it over on an agreement to buy telephony bandwidth."

Mr Barraket said that commitment would last just 12 months.

"We think it's a great deal," he said.

"Voyager Phone had become an addendum to MCI/Uunet's business as they have focused on commercial internet services."

Uunet was in the process of disposing of Voyager's erstwhile parent, the residential provider Ozemail, to Telstra, in what Uunet spokesman Mike Ward described as an "unrelated transaction."

"Voyager Phone is a non-core activity for Uunet, so it makes sense for us to dispose of it to E-Phone as they will still be buying bandwidth from us."

Mr Ward said Uunet had "moved off" the equivalent Ozemail internet phone business in Australia, Ozemail Interline, for "much the same reasons."

Uunet had already sold the intellectual and contractual rights of Ozemail Interline to United States based operator ITXC late last year, but Ozemail and Voyager had remained as affiliates, and those licences had now been transferred to E-Phone.

"Our relationship with ITXC now becomes E-Phone's relationship."

Until now, E-phone's principal business had been in public internet access terminals.

Originally a Sydney-based company, E-phone obtained a stock exchange listing here through its reverse takeover of commercial property shell Habitat.

Since then the company's share price had risen dramatically.

While Habitat shares hovered around 5c for the first half of 1999, E-phone shares yesterday closed at 74c, after topping 80c earlier this month.

Mr Barraket said Voyager Phone's distribution network would help to accelerate E-phone's roll-out of public access internet kiosks in New Zealand as well as generating revenue in its own right.

The Voyager Phone service, with an estimated 10,000 to 12,000 customers, allows users to place cheap calls from an ordinary telephone employing "voice over IP" (internet protocol), mainly by using pre-paid cards available from around 900 outlets.

E-phone had set a target of $1 million per month of revenue by June for the internet telephony business and was currently negotiating with 15 Voyager Phone distributors who would be involved in the kiosk roll-out.

"We were originally talking about putting in 250 to 300 terminals in New Zealand in the first year," said Mr Barraket.

"Now we are looking at more like 1000 over the next eight months."

He said the New Zealand kiosk roll-out would take precedence over the Australian kiosk operation, which comprised 14 sites with another six sites to be installed within the next three to four weeks.