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New Tel media release

  1. 23 July 2002

    NEW TEL CONSOLIDATES OPERATIONS


    Diversified Australian based telecommunications carrier and multi-media group, New Tel Limited, (ASX: NWL, NASDAQ:NWLL) will consolidate its recent $50 million acquisition of Digiplus Investments Ltd in Australia into a broad based international communications infrastructure.

    New Tel, which now ranks in the top carriers in the nation, has over the past year been on the takeover trail with acquisitions of telco and multi-media assets including Delta Phones (Australia $4 million), Cable & Telecoms (Australia and UK $20 million cash and shares) and Digiplus (Australia and NZ $50 million cash and shares).

    At a general meeting of shareholders to be held in August, the key proposal to be voted on is the allotment of $10 million in ordinary shares and $40 million cash for the takeover of Digiplus assets in Australia and New Zealand.

    Mr Peter Malone, New Tel's managing director and CEO, said today the merged entities will account for 1 billion minutes of telephony per annum returning more than $250 million and doubling New Tel's customer base in Australia.

    "Once consolidation of our communications assets is completed we will be able to leverage the economies of scale to achieve even better returns for our stakeholders.

    "It is also our intention to retain key Digiplus executives, especially founding CEO Mike Robinson who was previously the managing director of UK mobile telephony group Newgate Communications Plc and CFO Nick Kotzohambos.
    "Our view is that to succeed in telecommunications you have to expand strategically and rapidly but always keep you eye on the bottom line. This is what we have done with our acquisition of Digiplus - its highly complementary, has strong returns and offers excellent growth prospects.

    "It is important to note that Digiplus along with other recent acquisitions add to what is a now a fully international carrier embracing telephony, internet and multi-media businesses.

    "We have expanded our national retail presence through our acquisition of Delta Phones - with most of these stores to be New Tel branded to increase consumer and corporate awareness of our competitive communication offers.

    "As a telco only four years out from commencement of operations a key aspect to our success is the performance incentives we provide our senior executives with the view to ensuring New Tel stays ahead of its competitors.

    "This program is also in line with the incentive structures in place with the Digiplus and Delta acquisitions.

    "Incentives are one thing, making sure they achieve tangible results depends upon the underlying acquisition strategy of the company. Digiplus for instance, over the first quarter of 2002, had revenues of approximately A$24 million with a cash flow surplus close to A$1.4 million per month, so its an excellent investment on our part.

    "Our view is that to succeed in telecommunications you have to expand strategically and rapidly but always keep your eye on the bottom line. This is what we have done with our acquisition of Digiplus - its highly complementary, has strong returns and offers significant long term benefits to New Tel.

    "We believe that a meld of intelligent investments, incentives, technical expertise and skilled management will keep New Tel at the forefront of Australia's communications industries."


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