Article here for Costic
High demand gives power to People
Katrina Nicholas
2004/09/27
The surge in demand for high-speed internet access is beginning to pay dividends for People Telecom, with a number of fund managers making their debut on the tightly held register and paper tycoon Richard Pratt quietly increasing his stake when he can.
Since taking part in People Telecom's recent $2 million capital raising, Mr Pratt, via his private investment vehicle Thorney Holdings, has been steadily adding to his holding, taking the opportunity to buy a further 2million shares last Friday week when another shareholder wanted to offload some of its stake.
Thorney Holdings now owns about 2.9 per cent of the company.
Fund managers understood to also be buying shares in the junior telecoms company include ABN Amro and Citigroup, although neither are substantial shareholders just yet.
Queensland Investment Corporation entered the register as a top-20 shareholder last November.
Whether the burgeoning interest in People Telecom will force its four largest shareholders to reconsider their position remains to be seen.
People's largest shareholder is now Crazy John managing director Brendan Fleiter, followed by People Telecom chief executive and co-founder Ryan O'Hare.
Fellow co-founder Colin Marland is also a large investor, as is Crazy John's chairman, Barry Hamilton. Both Mr Hamilton and Mr Fleiter have bought more shares over the past few months and the four executives own 68per cent of the company.
Mr O'Hare said he might consider relinquishing some of his stake "if the price is right". But he said that People's major focus right now was on selling its broadband product to the consumer market.
"The integration of [internet service provider] Swiftel is all finished and done and while we're growing in the SME and corporate market, management has turned its focus to consumers," Mr O'Hare said.
"We don't need any money. We're profitable and although we're always looking [for other acquisitions] there's nothing on the horizon. So right now it's all hands on deck selling, selling selling."
Mr O'Hare said People, which is forecast to generate revenue this financial year of $100 million, would launch an above-the-line advertising campaign next month and was signing up about 150broadband customers a day.
People now has about 25,000 broadband subscribers and is on track to double that figure by June 2005.
Striking content deals with third parties was also a key part of People's strategy, Mr O'Hare said.
"Our plan is to be a content-rich broadband provider," he said.
People signed a deal with online music group Destra last Thursday that will allow its broadband customers to download songs from the internet. It is expected to announce a similar deal with the ABC soon. That deal will allow customers to receive streamed ABC radio via their broadband connection.
Shares in People closed on Friday at 17¢, off a 15.5¢, 52-week low hit earlier this month.
PEO
people telecom limited
