Overseas buyers for internet firm

By Chris Barton

Asia Online has snapped up New Zealand internet service provider Iconz as part of a $US35 million ($68 million) buying spree here and in Australia.

Asia Online is controlled by Softbank and based in Hong Kong.

The first phase of its expansion plan is a $A30 million ($37 million) investment in Auckland-based Iconz and two Australian internet service providers (ISPs), Internet Access Australia and InterACT.

The company also plans to spend a further $A30 million before the end of the year, to build a pan-Australasian, internet-based communications network for business users.

Asia Online, the leading ISP in Hong Kong, also has a presence in the Philippines, and recently opened an office in California.

The latest $US35 million round of venture capital funding has come from a J. P. Morgan-led syndicate including GE Capital Finance, Softbank Technology Ventures and Nexus Capital.

Softbank, which owns American IT publisher Ziff-Davis and has investments in Yahoo!, E*Trade, Verisign and USWeb, took a controlling interest in Asia Online in April.

Iconz is New Zealand's fourth largest internet provider in terms of turnover, believed to be between $6 million and $10 million a year. It was owned by Melco managing director, Ron Woodrow, who bought the company in 1995. The sale of a majority share to Asia Online is thought to be worth about $10 million.

In terms of customers, Iconz is much smaller than Xtra (230,000 subscribers) and Ihug (90,000 subscribers), but its focus on the business market means its 15,000 to 20,000 invoiced customers have a much higher value than the predominantly residential users of the larger providers.

Iconz customers include Te Kohanga Reo, Sky Television, NZ Post, the Ministry of Health and Colenso.

The company has a staff of 40 and as well as internet connections, provides web hosting and design, secure e-commerce transactions and internet installation and consulting services.

Iconz general manager Hugh McKellar said that under the Asia Online umbrella, the company would soon be able to provide a much wider range of services, including voice over internet protocol telephony.

"We are evolving from an internet services and solutions company into a communications company."