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Hier mal das ganze Interview bei Stockhouse zu lesen unter
http://www.stockhouse.com.au/interviews/apr99/042899.asp
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Es ist auf den 28. April datiert????? Sind uns die Aussies neuerdings 2 Tage voraus???


StockHouse Interview - Davnet Wired For Internet Success


• • •


Davnet rewires CBD buildings and installs its own infrastructure so tenants can use their Internet systems at a fraction of the cost, and at much faster speeds than traditional carriers allow. Their share price at the time of writing has skyrocketed by approximately 30% on heavy volumes due to their `blue sky` operations, moves into China and alliances with some very attractive global telecommunications players.

Taking a backdoor listing through a junior miner, Davnet is set to become a tech darling of the Australian share market. StockHouse caught up with Managing Director, Steve Moignard, on his latest weekly jaunt to Sydney from his base in Melbourne.

StockHouse interviews usually accompany StockHouse reports on the same company, revealing more in-depth scope, and are recommended reading in tandem with the interview. The reports are stored in the SHfn Archives index on the StockHouse.com.au home page. While StockHouse mostly avoids it, comments are occasionally edited for space and clarification requirements - without omission of meaning.

STOCKHOUSE: I read on your site (www.davnet.com.au) that your installation rates are currently three buildings a month - is that correct ?

Steve Moigland: Well, some months we`ll do three and some months we`ll do six. Some months we try and be able to do twenty. We use new contractors now and have operations in every state, so we can actually have parallel projects. Whereas, before, we had to have our key people on each one, and they could only handle so many.

We`ve really boosted that up because the limiting factor is the legal negotiations. We could physically do twenty a month, but it takes us longer. We can`t get twenty licences a month. Now, we`re lucky. Some months we get three and other months we get six or ten. So that`s a lot - we have three people full time working on licences.

We`ve just signed up the whole of the Morgan Grenfell Group - that`s fifteen buildings in one negotiation - but that negotiation has taken us six to twelve months. So that`s one of the key issues for us - the delicate negotiations to get those ten year licences with each building to put infrastructure in. Those buildings are being absolutely hammered by every carrier in the known universe at the minute to put stuff in, and negotiating those licences is a critical part of our business.

SH: What do you mean by 10 year contracts ?

SM: It`s a ten year licence to run the infrastructure in the building. We basically sign a lease or a licence to put our equipment in the building for ten years.

SH: And then you pull it out after ten years, or you just leave it there ?

SM: Well we haven`t ever got to the end of the tens years. I think what`ll happen is we`ll just extend it again.

SH: You have many different technological means to transmit the Internet signals - can you explain ?

SM: Yes, well there are different strengths and weaknesses for various topographic environments. Distance is a factor, radio spectrum is a factor, availability of ducting is a factor, weather conditions are factored in - a whole range of network design considerations to decide which technology we use on a building.

We always have two connections to a building, so there`s always full redundancy and the building never goes offline. That`s the whole aim - to keep quality service across the whole network.

SH: So you supply different technologies to every building ?

SM: Yes, so if one fails you can switch to the other. It automatically switches the load share. The thing is, what we`re building is a 100% packet switch network which means that the packets themselves know where they`re going, and they`ll find the best route themselves. That`s what adders do.

SH: So, your hub building in Sydney is the Grosvenor Tower ?

SM: In Sydney it`s Grosvenor Place, and we have subsidiary information and hot equipment here in Castlereagh St. We`ve got three floors here and we`re just taking another one. In Melbourne it`s the Rialto Building, and we have subsidiary equipment over at Collins St.

SH: So is the Grosvenor Tower able to provide signals to all of Sydney ?

SM: Basically, you could do a lot of Sydney from it, but you wouldn`t really want to do everything. You`d want to spread it out a little bit and use the advantages of having packets find their own way. You`ll get bunny hops here to here, and you`ll have some redundant links - like a triangle. For instance we`ll have a link to Chifley Tower, then a link down to Westpac Plaza and those three buildings can act as a broadcast point. It`s a redundant mesh.

SH: Are you paying hefty rents in buildings where you are placing the technology ?

SM:We don`t want to broadcast to our competitors… I know they go green when they know. I mean, just giving an indication… the truth is we pay anywhere between zero and $15,000 a year.

SH: How is it you can pay nothing ?

SM: Because the property managers want it. Because it makes their property more attractive to tenants, and it keeps the tenants there.

SH: Do the signals work better from high vantage points, like television ?

SM: It makes no difference with some particular technologies. For instance, it`s digital so you get it perfectly. We can provide - we`re negotiating with Foxtel at the minute - we could provide 150 digital channels. From every known source - through PCs - you just watch them on your PC.

But that`s just a tiny part of it. The Bloomberg and Reuters data feeds, for example, are the sort of areas that you can imagine work very well because they all use leased lines from Telstra. Cut all of those providers out and its coming through a simple wall socket very, very cheaply and effectively.

SH: But if we want Bloomberg and Reuters we still have to subscribe to them - and then bring it in through you ?

SM: Well the video stuff is free. The video channel for Bloomberg is a free service, you just can`t get it unless you`ve got a satellite dish or whatever and we can give it to you, no worries.

SH: Can you give us CNN etc ?

SM: Yes. NBC, CNN, Bloomberg and Reuters video - all that stuff we can supply. Now we`re negotiating with some of those people for broadcast rights and other legal rights. Reuters video is actually pay per view, but the others are all free.

I mean we`ve got a trial with Reuters where it`s not pay per view. It usually is - you have to pay for Reuters video - but for us, because we`re providing the delivery mechanism they are giving it to our top clients for free.

But certainly videos are part of our service - also video telephones - because it`s all network video capable, very high capacity. You can have a telephone on your desk which has a real video connection to anyone else on the Davnet network.

SH: So let`s say in our office on the 20th floor, what do we need to get Davnet`s signals ?

SM:Nothing, nothing - all you need is a wall socket that comes into your office that looks like a normal network wall socket, like down on the wall there. Looks like a little telephone socket. You have one of those in your data room then it goes on to your LAN, a little cable goes from there on to your server, on to your LAN. It`s a $10 operation and then you are a part of Davnet`s network.

SH: But you`ve got to wire up the building first ?

SM: Yes, we`ve got to wire the whole building.

SH: Can you tell us who your contractors are ?

SM: We use Skilled Engineering.

SH: How much faster is your connection than, say, an ISDN line ?

SM: Up to 100 megabytes per second in your wall socket. 100 megabytes per second from Telstra would cost you 50 E1`s, and an E1 costs about $30,000. So it would cost you 50 of those. We can do it for a couple of grand.

SH: How much cheaper are you ?

SM: Well, we could be so much cheaper it`s ridiculous, but we don`t price ourselves ridiculously cheap. We have always gone about 30% cheaper than competitors. We provide permanent virtual circuits; that`s from point to any point, interstate or intrastate.

Internet access including the lease line fee in any speed you want from 16K right up to 10-100M. Video conferencing solutions, telephony voice over IP, point to point. Tielines as well as gateway into the normal network, so it`s complete transference, except you`re making local calls every time instead of international.

Faxing - bulk outgoing faxing which saves a lot of money… companies do a lot of that sort of stuff. That`s just the range - every digital data product runs through the one cable and that cable has so much capacity, you can stick them all on the one socket.

SH: Have you got your technology patented or can someone copy it ?

SM: We have about five innovative steps, and if you took all those innovative steps together you could get a protest patent. The issue is we actually used this network while we were designing it - we actually were invoicing so we`ve got a prior use issue.

We couldn`t patent in Australia because we`re out there doing it, it wasn`t just a trial. But our intellectual property isn`t really one thing - it`s the whole way we do it. Now, our sales process, our marketing, the technology itself is pure standard LAN technology with a few tricks here and there.

Our advantage, the way we protect ourselves, is probably speed of operation. By being first on the ground - first mover advantage - we get into the building and sign up 30, 40, 50, 60% of the tenants. It`s very, very hard for a competitor to come into that building.

Things like network management, billing, software that we`ve developed - it`s all copyright owned by us and is not for sale to anyone else - so those things are protected. We purchased, of course, software technologies from other companies and put them into other subsidiaries.

Our faxing service, faxing software solutions, unified messaging products - we`ve bought them and they`re complete intellectual property issues that are ours. But the core stuff itself - the carriage network - really anyone could have done it, but it`s too late for them to try now.

SH: For your customer base, are you approaching people in the building on your own initiative, or going through building management ?

SM: We spend a lot of time finding out who the property manager is, and then we go in and we do a lot of work explaining to property managers and their consultants what our system is. How it`s different, what the advantages for them are - building a relationship.

Building a relationship with them is very, very important. Most of the other big carriers are unable to do this - somehow they`re just not able to do it. We`re way ahead of your big players like Worldcom - and anyone else who is trying to put stuff in buildings - we`re way ahead. But they take a while to get.

SH: Are there health problems with any of these technologies ?

SM: Every type of technology has some issues you`ve got to look at. For instance, even your ISDN boxes and stuff have EM radiation. It`s a matter of what is practical. Our stuff is very, very clean. The laser stuff - the infrared stuff - is extremely clean. There is no EM radiation, and it`s light, so there`s no microwaves escaping.

There`s no OH&S risk. It`s a really clean technology - totally clean. With the microwave there`s less output than you get from a mobile phone, and that`s from the whole building.

One dish is less than the output from one mobile phone, so really with microwave there`s always going to be a question mark over it because there`s a question mark over the whole technology. There`s a lot more health risk in a building just with mobile phone repeaters they put on every floor… there`s even problems with air conditioning.

SH: What is the cheapest technology you use ?

SM: Satellite is the cheapest form, but we would hardly ever use it - excepting some products we are developing now. Satellite time is available from a whole lot of different vendors and its getting cheaper and cheaper. It has certain purposes, for long hops. You know - here to China, here to wherever.

We don`t use undersea cables. But locally, we always use terrestrial - the best quality, fastest, fastest connection for people. From here to the US, from here around Australia, always terrestrial links.

SH: What about spectrum and bandwidth ?

SM: Well, there`s a couple of issues there. Firstly, in terms of transmitting between the buildings, transmitting between buildings involves light or microwave frequencies and there are various types of equipment that use various different types of frequency.

We can rent frequency bandwidth, or we can use public domain frequency bandwidth, which we would choose depending on what we need. In terms of light, there`s no issues with bands at all. Light allows us to do a gigabyte per second over five kilometres… or more.

Without any licencing issues from the government, or any other sort of issue excepting your carry licence - inside the buildings there are no frequency issues except in terms of bandwidth. We can supply up to 100 megabytes to every tenant`s socket. At the same time, the building itself can have a gigabyte structure inside and we can give you connections between buildings.

SH: You have to rent these bandwidths from someone else though ?

SM: No, there`s two different issues. One is the speed of our service and the other is the frequencies we use in the radio spectrum for some of our links. It`s a very minor part of our business, those links. We tend to use stuff that doesn`t have any frequency requirements like light. Light has frequency, but it`s light frequency itself.

I think the key here is that we have built a network which we own, and we could run over our network with whatever we please without paying anyone else anything. We do rent trunk space from, say Optus, Global One or whatever, but we use multiple vendors to get, say, international transit. Just like Telstra, or part owners renting parts of the old OTC network.

The bit we own, the most important is the last mile. It`s the copper in the buildings, owning that special sort of copper that we`ve put in and we own means that allow us to have control of the customer. We, at the end of the day, can deliver what we`re delivering any way we want.

And that feeds into what is currently a buyers` market. See, when you take the traffic from an enormous number of businesses and you approach say, One.Tel, Global One, Optus - you know, the whole raft of carriers - GPE and British Telecom, and you say well look, I`ve got millions of minutes and I`ve got gigs and gigs of bytes to buy - who`s going to supply me with that.

Now, obviously through redundancy we have connections to lots of these carriers and the traffic automatically goes to the cheapest. Yes, so we get a cheaper rate today - bang. We own the tail circuits, the last mile, the last 100 metres, that`s the most valuable part. Over the next 5 years that`s where the battle`s going to be fought and we`re going to be there - absolutely.

SH: You can`t get swamped by too many customers ?

SM: No, a hugely resilient network. ATMs between buildings, quality service guaranteed, service level agreements with our clients. We generally have 10 to 1 provisioning. It means we provide ten times the bandwidth for every one that we sell.

At the minute, just to give you an idea of what we`ve built, we`ve probably got the biggest local area network in the whole of Australia. Delivery owned, and carriage costs to 60/70/80, even hundreds of desktop PCs right now - which we double every three months.

SH: Your web site mentions 70 buildings you`re currently involved with ?

SM: That was identified buildings that we`re talking to. In terms of the actual list of buildings that we`re wanting to wire, its 200 in Australia.

SH: You`re already wiring 200 ?

SM: 200 we want to wire, 70 of them we`re talking to. 30 of them we`ve already done, or licenced or whatever.

SH: What happens when you complete your 200 buildings ?

SM: We make staggering amounts of money.

SH: You`re taking over Magna Data shortly. On their web site I counted 12 big name clients. Has that gone up since ?

SM: Well, they`ve got 4,000 corporate lines - huge, significant lines. I mean, we hope for even more things with their clients like E-Trade, Newscorp, Fairfax, the Australian Securities and Investment Commission, Deloitte Touche Tohmatsu, Bankers Trust… you name it… big guys.

SH: With international players the likes of NewsCorp and Bankers Trust, are you doing their buildings overseas ?

SM:Well, we`re dealing with their clients. Their IT departments are buying services off us. Property Management is a completely different approach, you`re going to talk to different people. These things all help, but for instance we use a good relationship with Commonwealth Funds Management, Grosvenor Place, 101 Collins Street, Westpac Plaza…

Sign up one building, you get the rest. Morgan Grenfell… sign up Governor Phillip Tower, you get the other 15. AMP… the fleet of AMP buildings. It is all contacts, and we`ve got a reputation now. People know we`re doing it, they know roughly what we`ll pay them to do it, and sometimes we`re getting people coming to us wanting to pay us to put it in the building. Because they want it.

Obviously if we are in Hong Kong, we`re not going to ignore Bankers Trust offices in Hong Kong. I mean, we`d be crazy to. We`d get a contact from here, but it will be a different person putting it in.

SH: Are you looking to go into the very lucrative and huge US market ?

The States we`ll go into eventually, but the States isn`t as lucrative as the Asian market. There`s just not as much money in the US for what we do, because already it`s a competitive, cheap ISDN regime there. Now, you look at Hong Kong and Australia, you have a monopolistic incumbent still charging an arm and a leg for ISDN.

That`s our key indicator… once we`ve identified markets like that we`ve still got this big profit sitting there that we can eat into. Then you look at the regulatory environment and if you can get a show on the regulatory side, then that`s the country we do first. The order of business for us: Hong Kong, Singapore, PRC, that`s where you`ve got it, laid out. I must say that Canada is much more attractive than the US, too.

SH: For what reasons ?

SM: The reason is deregulation. I mean, the US has already been deregulated for a long time and there`s much more competition in that field. The competition has driven the price of traditional telephony down enormously in the US and it`s world-renowned for being very cheap telephony. So it`s a harder market to approach, whereas there are better opportunities in other markets that are as big, if not bigger.

Once we have our 300 buildings, let`s say, in Hong Kong, and 200 in Australia and a few hundred between China and Singapore. Of course, it`s absolutely vital that we do more in America because that`s where the calls emanate volume. That`s where we`ll get a lot of carrier income. Mind you, if a customer wanted a US connection we`ve got a strategic alliance with GTE, and we can use that.

SH: You`re venturing into China in a JV. Is that what you`re after - JVs to go into Asian countries ?

SM:Hong Kong might be a little bit different, but I think we`d be very naive to consider being able to go into a place like China and just do business exactly as we do it here. I think that would be naive in the extreme.

There are a maze of issues - political, regulatory, commercial in China, and we feel it`s much better to deal with people who actually have some handle on that. And have both parties locked in to some form of mutually beneficial arrangement.

SH: But Asian deals are notorious for delivering little besides contacts, that may or may not be worth the cost.

SM:No doubt at all, some of these agreements are insurance. No doubt. But at the end of the day we are the operations, we are the salesmen, we have the client relationships. That`s where the power is - we invoice.

SH: OK, so you`ve got this heads of agreement in China, but you haven`t got a signed contract and there`s no legal system to hold up your signed contract anywhere in Asia, except maybe for Hong Kong. How are you going to protect yourself ?

SM: There`s another group we`re dealing with. Can`t say their name yet because they haven`t signed it yet, which will provide the ultimate insurance in China.

SH: You`re going to insure yourselves ?

SM: Not insurance in the literal sense, I`m talking about political support. See, China can`t deal with America at the moment in telecommunications. We don`t put up any money, our partners are putting up the money. Secondly, they`ve already got the infrastructure - 200 kilometres of fibre, 120,000 pager users, V-Set transponders, we just go in and operate them and make money out of them - and invoice customers.

SH: And give them 50% of your profits ?

SM: Of the profit, we`re still taking out all of our commercial fees. It`s what we`d be making here anyway.

SH: The $90,000 building set-up fee in Australia - translated into Chinese currency ?

SM: They put all that up. We operate, they fund. This is not a traditional joint venture… we`re not going into a cashless situation, a cashless company. They`ve got to be cashed up and we`re basically getting into the joint venture for mutual benefit.

These guys are a power company, and like all power companies they`ve got this thing in their head… "oh, we`ve got to do telecommunications as well, right". So they put all this fibre and everything down and they`re making peanuts off what they`ve invested. They need someone like us - smart operators to actually show them how to actually make money out of it.

We`re not going to do that for nothing. We`re not going to lock ourselves in to the profit we create. Their infrastructure… our marketing, our salesmen, we`ve got plenty in the kit and we control the client interface, always. Which means at the end of the day if they give us any trouble we walk with our clients and do alternative infrastructure, because that`s where the money is… it`s the clients.

It`s all about price and services that you provide, and the way you provide them. We feel that we can protect that. The other thing is that the funding of the company. I mean at the end of the day it`s going to start up privately. You know that means that the ownership is going to be substantially Asian anyway.

SH: Can you explain your first-rights-of-refusal contract with this Kiong Communications Investment Company JV partner in China ?

SM: We have first right of refusal. If they want to get out, we can take over the whole shebang. And there are a whole lot of issues there - they`re a relatively big group. $A500 million turnover and stuff on their pay utilities and some other such.

They want to - they would like to at some point - to sell the telecommunications assets into the joint venture and after they`ve done that maybe, maybe… all this stuff in China is BOT, build, operate and transfer. So you`ve got to look at every single project, what is its duration and what the terms are.

It`s different from here. It`s not like… it`s all just different. You`ve got to look at every single province in China as a special business case. And you have to probably have partners, probably have different partners in each province. We`ve got at least two big partners, which I`m going to add another one to.

I understand these issues you raise today. This is a worrying area, but look, it was pretty hard setting up the business here in Australia - but then it`s just as hard setting up in China. We`ve done it here so we`re confident we can do it again and get around the problems that we come into.

We`re not starting somewhere like Indonesia, Singapore - at least Singapore and Hong Kong have regulatory regimes. In China they do too, but it`s unusual to work out. It`s like a reverse engineer sort of job. Hong Kong and Singapore are quite… they`ve got a normal legal system. Singapore is one of the strictest in the world.

SH: You`ve just had a lot of placements on-market. Does the share dilution worry you ?

SM:No, not really. It`s great. At the end of the day, to stay alive and to be a big player we have to have our turnover up to $200-$500 million in three years - as simple as that. And we`re going to do that with acquisitions.

SH: It`s probably negatively affected your share price over the past couple of months.

SM: Well, as I say, the big game is to be a player. $200 to $500 million turnover. We`re not going to do that incrementally day by day just signing people up. We`re going to have to acquire people who have businesses that are compatible but can use our technology, and make a profit - whereas they may not be when we first see them.

You know, there`s a whole lot of telephone companies, resellers and stuff, a whole lot which are just perfect for us. Because you just suck them up and turn them onto the Davnet wiring system. There`s a whole lot of things like that and there will be requirements to do that, and there`s a whole lost of interest in the company to grow it at the right price.

Those targets, we like to look at them seriously and our view was we`ve been given a mandate with our market cap. We`ve been given a mandate to actually grow quickly. If we can do placements at a reasonable price, and we`re going to buy income producing assets - then the share price will reflect that after we integrate them. And there are others we`re looking at - now no doubt at all - we`re always looking. We have things come across our desk everyday.

SH: The placements were in fact fully subscribed ?

SM: Yes, over subscribed. I mean, they were all over subscribed. There was obviously… with the selling pressure that happened across our share price in the middle of the placement… there were a few people who were getting a bit iffy. But everyone stood their ground.

SH: Gilmore Gold, the old Golden Hills mining operation through which you listed, is being sold off ?

SM: We have an interested buyer, but there are some tax implications. Some of the assets have legs, some don`t. It`s basically not a main focus. We have a consultant whose job is to package those assets up, sell them, JV them, whatever. We`ve had auctions and sold off a lot of equipment, paid off a lot of leased stuff, we`re basically cashed out. Gold sites, rehabilitation… everything is fully booked - you know we`re basically clean out.

We`ve gotten rid of all the liabilities, guarantees, all those sorts of things. We`ve got registration on the one project that requires progression. There`s a couple of assets we`re keeping, because we think they will become things we have to look at again in about 18 months.

SH: There may be gold sitting under a few of them.

SM: Well, there is gold sitting under them. We know there`s gold at all of them. Golden Hills - while it actually didn`t develop enough of his tenancies - it did actually do enormous amounts of research, and very top quality research. We still have all that intellectual property and research clearly shows that there is a lot of gold in different areas.

Who knows where the gold price will be in 18 months time. It may be even worse with a Swiss sell-off or whatever - or it may be better - but at the end of the day the cost is zero to keep what we`ve got for 18 months.

SH: Why did you choose Golden Hills out of all the junior explorers ?

SM: Well firstly, there was clearly a path to control. They didn`t want to hang around, and that was important to me.

SH: You knew them, or someone introduced you to them ?

SM: Intersuisse introduced them. They had a clean skin, no debts, a good credit rating. Not on the verge of bankruptcy. We knew their paper was pretty much worthless. We had to add value to the paper, and we did.

We knew we could. We knew we`d have a story and it would sell, and we could deliver on it. So that`s why we took the operations. The actual assets were quite good though, things that could be sold off.

SH: So you paid Golden Hills management out, or they just left ?

SM: They just left - they were very, very good. They stuck around, helped us, taught us the ropes with the ASX, taught us the ropes with a lot of management levels, the public company… stuck around.

We`ve still got one board member who was in the original thing, and he`s got good telecommunications exposure experience, so we want him there. He`s non-executive. And bit by bit, one by one, it wasn`t appropriate for the others to hang around.

SH: How many customers in Australia and Hong Kong would your massive GTE partner from the US be looking to gain with it`s international push ?

SM: Oh, I don`t know. Hong Kong probably zero at the moment. They haven`t got anything there - that`s why they`re desperate to get in there. Australia… they`re going to be a significant provider in Australia. I mean, the GTR and Bell operating company can be the biggest Internet company in the world.

They`re an enormous company, and yet their overseas infrastructure is small by comparison to some of the other big players. They`re beginning to grow rapidly, and they need operations people like us to help deliver it. They do have a substantial customer base in Australia, but obviously we`re not at liberty to reveal information like that. Very similar to a Global One or Bridge Telecom type of customer base.

SH: Your link with the GTE giant didn`t cost you much either ?

SM: No, nothing. Well in fact they`re paying us. The reason they went with us is the quality we show. We`ve now been working with them for a long time. We`re looking at a secure location in the Southern Pacific region. They could have put servers in Hong Kong or any other of those places, but they don`t consider that`s currently appropriate. We`re very friendly, we`re not a threat to them like Optus or Telstra could be.

SH: How are things going with your Newbridge alliance ? Are there still only 3,000 lines between Sydney and Melbourne ?

SM: Well, there`s a sort of frame order or whatever in place, and an MOU for them to provide the core voiceover IP stuff. But we do also deal with Cisco, and we have model vendor strategy at the minute. We may be getting closer with some of those vendors shortly, but that`ll all be worked out later.

Effectively the amount of hardware we buy is relatively insignificant compared to the marketing and the sales costs and everything else. It comes out overall, our hardware isn`t enormous - not like Telstra or anything like that. We don`t have to buy $13 million switches.

We buy a $15,000 router from Cisco, and they like it more if it`s a case study. All the vendors are fighting to use us as a case study. Our Newbridge relationship is very good… I mean they provide good quality equipment and they provide us with good support.

SH: And your alliance with Backup Net ?

SM: Well we`re providing a service, they`re buying the link. They`re meeting their contractual requirements - we sell their 250 links, we help promote them, we give them access to our customer lists, our agents.

Our sales people know about the product and provide leads to Backup Net. It`s a third party product. If there`s ever a need for an ISDN line we put in our alternative so they can provide their backup service to the corporates effectively. Like all relationships, we`re wanting to build it and they`ve got commitments they have to meet quarterly. So far they`re doing it.

SH: Has anyone been looking to takeover Davnet ?

SM: I think we have a few people, but it`s really not a relevant issue for us at the minute. We`ve got things we can do first, and for me I want to see the stock at $1 twelve months from when we originally came up. The only way we`re going to do that is through acquisitions, revenues and earnings.

SH: Your top share price to date was in the sixties ?

SM: $0.62 I think was the top.

SH: Then it retreated again.

SM: Well, that was hot stuff. At the end of the day who`s going to want to pay $150 million for Davnet unless they really have the same core vision as we do. Unless we`re really beginning to hurt them, give us six or eight months and we have another 50 buildings wired - we`re taking a significant proportion of CBD traffic.

That`s a 60% market take-up on each building. Now, that`s a pretty fair market share across an enormous, diverse range of companies for any telco to get. You`ve got to sting someone, one of the local players, before they really take notice of you. For instance, in terms of corporate strategy, in terms of real revenue potential, Davnet is a more significant thing than say Ozemail. It really is.

Because we really have a high margin business that`s long lasting, with our own infrastructure. We`re a real competitor to Telstra and Optus. We actually have copper, no-one else does. Without being detrimental to any other carriers - the best message carriers in the world have three things: they have a cohesive vision, they have financial resources and technical resources, and they have the will to grow.

If you look at the carriers in Australia you don`t really see all three in any carrier, except for Davnet. The other guys like Telstra, they have no real cohesive vision. They have heaps of financial resources, but they have no will to grow. All they`re doing is projecting what they`ve already got.

You look at Optus, they have the will to grow, but they don`t really have a cohesive vision. They definitely have the technical resources, so they`re closer, but they`re still not at it. You look at Primus and all these other guys, they`re all missing something. Primus is a good example - they don`t have technology that differentiates them, they`re all using the same technology…you know, narrow band, resellers and switch carriers. So what? They`re a dime a dozen.

[defizit1]

Leider ein Versehen - Interview ist genau 1 Jahr alt - war keine Absicht
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defizit1

[Rudi]

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