By CHRIS BARTON

On paper Dr Louis Arnoux, co-founder and managing director of Christchurch-based Indranet is worth $46 million. But he insists he's not building "cutting edge technologies" for the money.

Dr Arnoux wants to change the world.

"The key reason is you've found something that can change an aspect of life for the better, and you want to do it."

Mostly he's talking about his radical new telecommunications networks, "indranets," which promise a quantum leap in bandwidth and computing power at a fraction of the cost of existing services.

But he can also enthuse about cars running on compressed air, alternative power supply systems and storage, monitoring the world's fragile ecology, and reconfigurable advanced network computing.

All of these are now part of the Indranet vision in which New Zealanders are being asked for the second time to participate.

Indranet is seeking $5 million from the public through an offer of $1 shares closing on March 31. The minimum parcel is 500 shares.

After the issue, Indranet will have a market capitalisation of just over $195 million. The five million shares on offer constitute 2.56 per cent of the company.

The first offering, between December 1998 and June 1999, raised $2.6 million. Subsequent investments last year when the company was trading on the unlisted market - at one stage as high as $4.70 per share - have raised a further $2.2 million.

There are 1450 shareholders, who recently benefited from a four for one share split. The bulk of the shares are held by a "super 12" of investors who are also millionaires on paper and include co-founder Andrew McGregor ($23.5 million), Indranet chairman Russell Fitts ($19.2 million), Peter Macaulay ($24.1 million), Dan Hilgendorf ($24.1 million) and Michael Kain ($16.2 million).

It's hard not to dismiss Indranet as yet another overvalued "blue skies" technology company with no product and no revenue, but promising the earth in future earnings.

The hype is certainly there: "We are dealing with cutting edge technologies - the most advanced technologies in the world," says Dr Arnoux.

And so is the lack of revenue. For the six months to June 30, the company shows a loss of $899,664.

In 1999, it churned through $1,612,241 and in the nine months to December 1998 it lost $403,532.

But as the prospectus and investment statement point out, Indranet is still in the early research and development phase of bringing its vision to market.

The company has also gained a considerable boost from an assessment report by top telecommunications consultancy Amos Aked Swift.

The consultancy describes the Indranet architecture as "entirely feasible and has the potential to provide improved network dynamics during times of high traffic volumes and network events which could cause significant overload in existing networks."

Amos Aked Swift says the difference between Indranet and traditional telecommunications networks is that the latter separate the customer premise equipment from the core network to isolate the network, network management and billing systems from any intervention or interference by the customers.

Indranet does the opposite by having core network functionality residing on consumers' equipment in a multi-faceted device known as a "minder" - a combination of wireless transceiver, router and computer. Multiple minders "mesh" together to form a network which can interconnect to the existing telecommunications infrastructure.

The report says the architecture means "there will have to be greater levels of security and restricted access available at the user located minders."

Amos Aked Swift also comments on Indranet's multi-stage development of the Minder technology.

"It is considered that the $50 million forecast to develop the core application vehicle is not unreasonable, and that further development costs of $10 million to $150 million will be required for specific applications."

The report notes "there is significant work still to be undertaken on the software to operate the minders and to ensure routing on the radio network."

While it's difficult to get to see Indranet prototypes in action, it's not impossible, says shareholder Bruce Whistler who bought a small parcel of shares in Indranet's first offering.

Impressed but not totally convinced Mr Whistler visited the company's Christchurch offices and got a demonstration of prototype minders delivering a two-way videophone link from the office local area network to a roving notebook user in the office carpark.

After the demo he bought more shares through the unlisted market at an average price of about $3.

Dr Arnoux says Indranet will this week announce its first client, for a communication project of about one thousand nodes in a European city.

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