Ann: ASSET: TEL: Telecom acquires Business Cloud specialist Appserv

• Release Date: 18/06/14 09:07
• Summary: ASSET: TEL: Telecom acquires Business Cloud specialist Appserv
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					TEL
18/06/2014 09:07
ASSET

REL: 0907 HRS Telecom Corporation of New Zealand Limited

ASSET: TEL: Telecom acquires Business Cloud specialist Appserv

Market Release

18 June 2014

Telecom acquires Business Cloud specialist Appserv

Move further enhances Telecom's leadership in Cloud computing

Telecom announced today it has signed a conditional agreement to purchase all
of the shares in leading business Cloud services specialist Appserv Limited.
The agreement is subject to conditions which are expected to be completed by
early July 2014.

Telecom New Zealand Chief Executive Simon Moutter said that the acquisition
of Appserv adds to the significant investment across Telecom and Gen-i in
Cloud services and provides a major new piece in the Cloud jigsaw.

"We see this as a strategic business move giving the Telecom group a very
strong New Zealand Cloud services portfolio. The acquisition of Appserv is an
excellent complement to the purchase in 2013 of Revera and the ongoing
investment we are making in data centres."

Telecom Retail CEO Chris Quin said, "We pursued this opportunity because many
thousands of businesses already supported by Telecom Business Hubs, and other
channels within Telecom Retail and Gen-i, want to take advantage of the Cloud
but need a hand to get there.

"We know that the benefits of Cloud computing are still largely untapped by
New Zealand business, particularly at the small and medium sized enterprise
level. Cloud computing makes it easier for New Zealanders to conduct their
business, anywhere, anytime, helping to reduce the hassle and complexity of
IT systems.

"Through Appserv, Telecom can help more New Zealand businesses fulfil their
potential using the power of Cloud computing and IT as-a-service."
Appserv is a growing business that has proven and market leading capability
in providing Cloud and Desktop 'as-a-service' offerings, with customers
across New Zealand ranging from early stage to listed companies and in
private and government sectors.

Appserv Managing Director, Graham Clarke, says "We're pleased to combine the
leading Cloud solutions capability of Appserv with the ambition and reach of
the Telecom Group. We're ambitious ourselves, and we see a perfect fit with
our aspirations and how Telecom intends to transform itself to Spark and help
more New Zealand businesses grow."

Mr Moutter said, "The combined capabilities of Appserv and Revera mean we can
now offer leading Cloud computing expertise to all New Zealand businesses,
through Telecom and Gen-i sales channels.

"Revera is a Cloud computing specialist that provides Cloud solutions
predominantly for Government and corporates, while Appserv brings specialist
Cloud Desktop-as-a-Service solutions for a range of business sizes,
particularly small to medium sized.

"It's a powerful combination that adds to our existing strengths in Cloud
infrastructure, mobility, managed ICT and platform as a service. Gen-i is
making big strides in all these areas. We have secured a number of
significant new IT as-a-service contracts. We have added new or imminent data
centre business totalling in excess of 250 racks since the beginning of 2014.
Revera is continuing to grow strongly and perform well.

"Our investment in data centres has continued. In Wellington, a new Revera
centre opened last year that is now 100% allocated, with a 3rd centre due to
open in October. In Christchurch, a new green-fields centre opened in August
and is already over 30% full. In Auckland, a new high resiliency data centre
in Takanini is due to open in October, with 38% of capacity already
allocated.

"We're confident that the addition of Appserv to the group portfolio gives us
the ability to meet the needs of even more customers."

The move is consistent with Telecom's growth strategy, in particular its
priority to win the future by investing in data, mobility and Cloud services.

Mr Moutter added, "As we transform to Spark, we think this puts us in an
outstanding position to help New Zealand businesses navigate a digital future
in which Cloud computing will become increasingly important."

- ENDS -

For media queries, please contact:
Richard Llewellyn
Head of Corporate Communications
+64 (0) 27 523 2362

For investor relations queries, please contact:
Mark Laing
General Manager Corporate Finance
+64 (0) 27 227 5890

Background:

About the Cloud computing market in New Zealand
o Independent research by Ovum for the MYOB Business Monitor shows that only
16% of NZ SME's use the Cloud.
o SME's that do use the Cloud are 16% more likely to be growing than those
that don't.

About Appserv
o Appserv offers a complete IT infrastructure service to businesses that
require reliability, security and flexibility.
o Appserv's customers range from big to small across a range of industries
including professional services, importers, healthcare, retail, government,
manufacturing and more. This is supported by a purpose built data centre.
o Best of breed Auckland based end-to-end Cloud services company
o Strong word of mouth relationship and solutions based business
o 14 years plus of consistent growth
o The purchase price for the shares is $17 million.
End CA:00251719 For:TEL    Type:ASSET      Time:2014-06-18 09:07:34