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Telco shares jump after forecasting massive revenue boost (rpt)

Australian Associated Press

(Repeating for some subscribers)

By Ben Ready
BRISBANE, Jan 4 AAP - Telecommunications group Telco Australia
expects a massive boost in revenue this financial year after
signing a deal with United States-based wholesale telephony carrier
NTM Inc.
The Brisbane-based company believes revenue associated with the
deal will climb to $330 million in the 2000/2001 financial year
following a $142 million jump this year.
The company had previously forecast revenue for the year of
$17.6 million.
Telco shares nearly doubled today surging 37 cents to 76 cents.
Subject to shareholder approval, Telco will issue the vendors 14
million shares at 40 cents and six million listed options at 20
cents each for a total consideration $6.8 million to fund the
agreement.
The vendors have also been granted an option to purchase a
further three million Telco shares at 50 cents per share.
NTM operates an international Gateway switched network.
Under the agreement Telco will operate the NTM business and
assets which include switches and points of presence (POPs)
globally which are used for international trunking, call collection
and tolling, ingress and egress of international and domestic
telephony traffic.
"NTM has agreements and established relationships with the
Concert consortium, Cable & Wireless, British Telecom and France
Telecom," Telco managing director Siegfried Konig said.
"Under these agreements, NTM Inc provides termination of voice
traffic to Southeast Asia and utilises those carriers to terminate
NTM's traffic internationally with appropriate settlement
arrangements."
Telco will also acquire an interest in NTM Inc's associated
company Gogo.net Inc which has agreements with US-based company,
Level 3, to launch its pre-paid Internet products in to the US
market.
Mr Konig said the agreement heralds Telco's future emphasis on
large volume telephony wholesale business and involvement with
Internet products at an international level.
He said the NTM agreement will increase Telco Australia's total
pre-tax profit this financial year to $5.6 million on revenue of
$160 million, up from the previously forecast $17.6 million.
The new profit forecasts represent earnings per share (EPS) of
4.49 cents and a P/E ratio of 8.69 times.
AAP
04-01 2104
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