Hi Blokes,I intend responding to your enquiry once I have...

Hi Blokes,

I intend responding to your enquiry once I have revisited some of my earlier observations from HC1 late last year when I commented on the consolidation prospects of AMM, PWT, UEC, et al.

In my view, the consolidation imperative for the broadband and smaller telco industry is growing, not diminishing, but as with all things, it remains a matter of time before things emerge.

In the case of UEC, I commented in October last year that they needed to writeoff their investments, the carrying value of their network, and engage in management re-construction so as to present a more dedicated and professional looking team.

In many respects, they have now done this, and they are concentrating on their form markets (ie: Government, large Corporates, Institutions).

Peter's confirmation in the role is something that I welcome and represents another step in the eventual and emerging recovery of UEC's fortunes.

One thing though that they still remain lacking on is effectively sending their message to the market, whether that be analysts, retail shareholders or the institutions.

Last year, during some external discussions, I argued that a prospective incoming CEO should undertake a 3-tiered investment briefing approach. The first tier would result in UEC's public sources of information being overhauled (ie: website, ASX releases, etc). This, has occurred.

The 2nd tier would be to conduct dedicated analyst briefings, to not only explain the UEC story, but also to offer the market a better understandicng of the strategic drisvers, and future business imperatives of UEC (including, in the area of broadband demand, etc). In part, this has occurred, but should extend beyond Peter McGrath's Open Briefing approach (at the time, I was advocating institutional brieficngs, etc).

The 3rd tier would have been to establish representative shareholder forums cutting across the retail, key investor, and institutional segments of UEC's representatiave shareholdicng structure. In this way, shareholder reform, and open dialogue could occur which would go a long way to restoring the underlying integrity of UEC and its business philosophy. To my knowledge, however, this has not yet occurred.

UEC, therefore, has now completed part of its journey, but the remainder of its journey will require it to gain critical mass. This, in my opinion, can only occur through industry consolidation (in some form or another) occurring.

The same applies to PWT and AMM. Although, with AMM, I was also pleased to see Rob Taylor's appointment earlier this year as CFO, a person for whom I have great regard, having previously worked with him elsewhere in the telecommunications environment.

Going forward, I know that several HC posters have commented on the IEEE 802.11 wireless LAN standard and what, if any threat, it poses to wireless broadband (ie: 3G), the local loop (ie: TLS), and /or fixed broadband (ie: PWT, AMM, UEC, etc) here in Australia.

My views on IEEE 802.11 is that it is (and will remain) a niche LAN standard suitable for use in local, or closed communities (ie: an internal office environment, across a school campus, within the home environment, etc). It will not, however, either replace or mitigate the extent to which broadband services will be developed or applied into service.

If anything, the proliferation of IEEE 802.11 solutions will help usher in an exponential increase in the underlying demand for broadband here in Australia, whilst providing an opportunity for niche suppliers to bypass the need to take wire to, or from, the kerb.

I will, therefore, review my earlier observations in more detail and post back some commentary, both on IEEE 802.11, broadband, and the smaller telco arena asap.