weakness today-chartists, page-8

alinta - uec sale Hi Grant,

Surely SingTel would be interested in UEC for more than just cost savings?

UEC's recent figures confirmed their claims of market leadership in Ethernet bandwidth.

So a M&A would be a convenient way of Optus updating its bandwidth products and not losing out to UEC on bids for new business.

The merged UEC segment would also sell more bandwidth because the biggest customers would now be confident to use them.

It would hamper TVG/PWT because UEC would switch business away from them.

AAPT/TEL also would not like UEC taking the ISP business away from them.

Increased business, better combined margins and distress for smaller competitors makes such a scenario attractive.

I bet fellow UEC shareholders would be quite happy to be paid out in SGT shares, making the $250m fundraising a neat and simple manouvre.


P.S. I've only spotted the Sainsbury article just now, but am comforted by its turnabout respectful assessment of UEC:


http://australianit.news.com.au/articles/0,7204,7228910%5E15309%5E%5Enbv%5E,00.html