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Telco set for online ventures

By Christine Lacy
Technology group Telco Australia Ltd is today expected to unveil a portfolio of deals
worth $10 million in its emerging role as an internet venture capitalist.

The Brisbane-based listed telephony and internet company is also believed to have
signed an alliance with bricks and mortar retailer, Spotlight, for the sale of its
manchester wares online. The deal will include the placement of up to 5 per cent of
the group's issued capital to its new alliance partner.

Shares in Telco Australia on Friday gained 10¢ to end at $1.23 after enjoying a
spectacular run for the week that saw the stock catapult 95 per cent.

The group, which is headed by Mr Siegfried Konig who controls 15 per cent of the
company's issued capital with fellow founder Mr Dan Cavalli, is expected to
establish a stand alone subsidiary, Telco Internet Investments Pty Ltd, as the
vehicle for its investments in small high-tech entities.

The group will back two internet companies with funds totalling about $10 million
with a view to floating the businesses on the market within six months. The directors
are understood to be signing off on the deals today.

In return for its seed funding, it is understood that Telco Australia will take at least a
20 per cent interest in each of the ventures, which include a Sydney-based online
travel business and a Sydney-based business-to-business portal.

Last year, under a similar model, Telco acquired a 20 per cent stake in Technology
Licensing Ltd and GPS Online by sponsoring their respective $55 million and $5.8
million floats.

It also has a 51 per cent interest in, a bilingual Chinese and English
internet content provider, and is associated with in both Australia and the
United States.

It is through the latter that Telco is understood to have entered into its alliance with
Spotlight, which boasts an 85-strong retail network, for the provision of pre-paid
internet products to its 1.5 million-strong customer database.

In the past year, Telco Australia also purchased US wholesale telephony carrier
NTM Inc as part of its core business in the management of global networks.
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