COMindico

» see comindico.com.au as it lived, on the wayback machine

~ the last words ~

It began in 2000 as IPTel, started by Wayne Passlow on institutional money from AGL and AMP alongside JPMorgan. Behind them were the two names that turn up in every Australian media story of that decade: James Packer through Consolidated Press Holdings and Lachlan Murdoch through Queensland Press. The renamed COMindico built an IP and MPLS network running entirely on Cisco equipment, with SS7 interconnects into Telstra and 66 points of presence, one in each of Telstra's call collection zones. That footprint put voice and internet access within reach of something like 97 percent of the Australian population. Its own Wikipedia article claims it was the largest rollout of Cisco's MGCP technology anywhere at the time, a line that has sat under a citation-needed tag since 2007.

The business was wholesale first. Other people's ISPs ran on it, which is why most of the Australians whose calls crossed this network never saw the name on a bill. Larry Kestelman's Dodo was one of the clients that kept the lights on.

Money was the whole story from late 2001, when the initial funding was gone and the model was not delivering what the investors had been promised. In January 2002 the board replaced the chair and much of senior management and brought in John Stuckey to rebuild the business around something that worked. He got Cisco to park $65 million of hardware debt in permanent suspense, with the existing shareholders putting up half the turnaround money and Cisco agreeing to the rest later. It worked well enough that COMindico reached profitability in early 2004.

~ the record ~

~ the week it fell over ~

Profitability is where it went wrong. Cisco came back for the rest of the 2002 agreement, wanting to push its edge technology across the network it had paid for. The board, by then made up of representatives of the institutions that had funded the turnaround, decided the business could manage without the extra money. It installed a new management team and sent Stuckey on gardening leave.

Cisco refused to fund anything further at a board meeting on 22 September 2004. That night the company confirmed a breakdown in negotiations with potential equity investors and appointed Peter Walker and Steve Sherman of Ferrier Hodgson as voluntary administrators. On 23 September the facility agent acting for Cisco Systems Australia appointed McGrathNicol as receivers and managers over the top of them. The first creditors' meeting was set for 28 September. On the Whirlpool forums, where Australian broadband customers worked out what was happening to them, the read was that resellers should prepare for whatever conditions a new owner imposed.

~ the price ~

SP Telemedia announced on 1 November 2004 that it had agreed to buy the assets and business from the receivers. The network had taken four years and roughly $400 million to construct, with $175 million of that lent by Cisco as vendor financing, which is how the company's hardware supplier ended up as the largest unsecured creditor of the business it had equipped. The reported price was $27.5 million, under a tenth of what the thing cost. B Digital took half of it for $13.75 million in cash plus a share swap. SP Telemedia became Soul, and TPG took Soul in a reverse takeover in April 2008.

~ the note from here ~

Australia in 2004 had a market where a privately funded carrier could build a national IP network and then be absorbed by a competitor six weeks after running out of road. Turkey in 2004 had Türk Telekom, and I had TTNet because there was effectively nothing else to have. A wholesale carrier collapsing was not a thing that could happen to me, because there were no wholesale carriers to collapse.

Wikipedia dates the receivership to July 2004. The trade press and the receivers both put it in September, and the September dates are the ones with documents behind them.

@}-->--

              )
             (_)
            .-'-.
            |   |
            |   |
            |   |
            |   |
          __|   |__   .-.
       .-'  |   |  `-:   :
      :     `---'     :-'
       `-._       _.-'
           '""""""

« previous  ·  random  ·  next »