TeamTalk gets foot in Araneo's door

Listed mobile radio company TeamTalk has taken a cornerstone holding in the telecommunications infrastructure company Araneo.

TeamTalk runs nationwide cellular-like networks for commercial and industrial users of walkie-talkie type handsets, including transport companies, taxi firms and security guards.

Wellington-based Araneo has been providing last mile broadband and high-speed connectivity networks using microwave links since May 2004.

Founder and managing director David Ware said TeamTalk was a mature business with a strong cashflow.

"The downside of TeamTalk is that we don't really have a growth story," he said.

The company had been positioned for a "big step" with a listing on the NZX in May 2004.

This was designed to raise the firm's profile and make it easier to raise large amounts of equity if needed.

However, no big deals deemed appropriate by Ware came along.

"So rather than looking for great big things to do, we've started to look at little things, and that's where these Araneo guys come into it."

TeamTalk has paid an undisclosed sum for a 35 per cent stake in Araneo.

Ware said the acquisition gave TeamTalk a foothold in the fast developing market of high-speed wireless data without much risk or distraction from the core business.

"The Araneo guys like it because they get access to our cash and our core engineering knowhow and sites they can bounce their signals off.

"We like it because it brings us into this world, and with unbundling and all the things that are happening around that, who knows what opportunities might pop out."

TeamTalk's shares closed yesterday unchanged at $2.55.