Chairman`s AGM Address to Shareholders
Announced on 2000/11/29 20:21:21.
Part:A 1868 words
Status: Not market sensitive (N)
Industry Sub Group: Other Telecommunications (184)
NEW TEL LIMITED 2000-11-29 ASX-SIGNAL-G
HOMEX - Perth
Good afternoon Ladies and Gentlemen and welcome to today's Annual
General Meeting of New Tel Limited.
My name is Harry Sorensen and I am the Chairman of the Board of New
Tel. My fellow directors joining me this afternoon are
* Mr Peter Malone, Chief Executive Officer of the company
* Mr Domenic Martino
* Mr Paul Evans
* Mr Gary Koh
* Mr Mark Hake
* Mr An Zhou.
Also joining us is our Company Secretary Mr Craig Piercy. Director Dr
Salim is not attending today. He was due to offer himself for
re-election to the Board at today's meeting however he has advised
that due to other business and travel commitments he will not be
This is certainly unfortunate news for our company, as Dr Salim has
been with us since 1992 and many of us are now privileged to call him
our friend. Therefore on behalf of myself and my fellow directors, I
would like to take this opportunity to place on record our thanks to
Dr Salim for his support and contribution over the past eight years
and to wish him all the best for the future.
A quorum of shareholders is present so I now declare the meeting open
at 3.00pm. Your Board welcomes shareholders and selected visitors to
the meeting. The company's accountants and auditors are also present
today. You will of course be aware that only shareholders are
entitled to be heard and vote at this meeting. I also advise you that
a current shareholder listing and register of Directors' interests is
available for inspection by shareholders.
At today's meeting we will be considering a number of resolutions
that are basically housekeeping matters for the company.
We have lodged documentation for an EGM with the ASIC and ASX, and
these documents cover our china internet project and our planned $200
million capital raising. We expect to send information to
shareholders shortly and hold the EGM in early January 2001.
Before we move on to the formal business of today's meeting however I
would like to take this opportunity to give you an update on New
Firstly we will view a new promotional video of New Tel.
(run promo video)
Our new corporate slogan is - Everybody wants it. We've got it!
That's a bold statement to make. But we believe it describes the
ethos of New Tel and explains how we've come so far, so quickly.
New Tel is gaining momentum. We are developing into a global
communications company by becoming a world-class competitor in
high-growth business sectors.
As a fully licensed switched carriage telecom service provider, New
Tel attracts retail and wholesale customers by offering tariffs that
smartly undercut our competitors.
New Tel also has a large opportunity to create an internet business
for serving the people of China through our alliance with Xinhua
Holdings, a commercial arm of the official Xinhua News Agency.
We have a growing revenue stream and more than A$70.0 million in cash
and liquid assets for project development, acquisitions and joint
Our mission for the coming twelve months is to build share value. We
aim to do this by:
* Becoming a global player in the worldwide evolution of the internet
* Connecting China's millions to the world and the world to China
through the internet
* Providing affordable, state-of-the-art international telephony
across Asia Ppacific.
A year ago we set ourselves a grand vision for New Tel - to become a
major internet player in the Asia pacific, particularly in China, and
we are moving toward that goal at full speed.
The reason we feel confident about our ground breaking China venture
is that we have a powerful strategic partner - Xinhua News - China's
official news agency, and one of the world's largest newswire
services. The strong support of Xinhua inevitably brings New Tel the
support of other pillars of China's emerging
telecommunications-internet establishment. And of course we have a
Xinhua representative, Mr An Zhou, on our Board of Directors.
Under Chinese law no outsider may own internet assets. China still
maintains strict controls over public channels of communications. But
once the PRC has formally entered the World Trade Organisation,
expected soon, we believe these prohibitions will go, leaving New Tel
deeply imbedded in China's communications infrastructure through our
In the meantime, New Tel has entered into agreements that enable us
to essentially have management control over the Chinese internet
assets and develop these and earn revenues for our company.
We believe that ultimately our move into China will pay off in
growing revenue numbers for New Tel, and that our investors will
become major beneficiaries of a bold and exciting management
Our assets will include a Chinese and English language portal, at
least two Internet Service Provider (ISP) joint ventures, and three
Internet Content Provider (ICP) joint ventures, one in education,
one in statistics and information technology, and one in
telecommunications. Each will produce a stream of revenues.
The ISP's will generate revenues by 1) providing internet access to
consumers and corporations, 2) designing, developing and hosting
websites, 3) developing and hosting e-commerce applications, and 4)
managing corporate intranets and e-mail systems.
Recurring revenue streams will be one of the primary focuses of our
portal business, with income derived from:
1) advertising, customer e-mails, newsletters and banner ads
2) subscriptions for high value content, specialist newsletters and
3) commissions from transactions originating from the portal, and
4) e-commerce revenues from sales originating from the portal.
New Tel's existing China interests are protected to the extent
politically feasible by agreements and understandings that define the
current and future operating structures of the joint venture with
These agreements and understandings also set forth the
responsibilities and rights of the partners. Let me add that we have
been engaged in business activities with Xinhua for more than five
years, resulting in a high level of mutual confidence and trust
(guangxi), an essential for trading with Chinese partners.
Our intent is to capitalise on our guangxi with Xinhua and related
PRC government entities, ultimately to emerge as one of the dominant
players in the China internet universe.
We aim to make the New Tel internet portal, nihao.com, the place that
millions of Chinese visit when they are seeking any sort of news,
information, entertainment or business. Our plan is to offer a wide
diversity of quality content to attract users and generate
Of course our first venture with Xinhua, the establishment of an
Australian telecommunications carrier, has proved very successful.
New Tel's entry into the telecommunications market as a carrier
brought home the importance of quickly establishing a core customer
base for voice and date. Our strategy from the start was to focus
our resources on niche markets such as the ethic Chinese and other
southeast Asian populations living in Australia.
The strategy has worked, producing our first 25,000 fixed wire New
Tel subscribers over the past 12 months, with the prospect of 70,000
by 30 June 2001. Our goal is to make New Tel a household word and the
telecom and internet vendor of choice amongst Australia's 350,000
ethnic Chinese. We are doubling our marketing efforts to important
minority groups during fiscal 2001 with a targeting strategy based
* Sales promotions designed to achieve brand recognition and
acceptance through sponsorship of cultural events. In January 2000
New Tel was the main sponsor of Sydney's Year of the Dragon
festivities in the harbour and downtown areas of the city. During the
twenty-seventh Olympiad in Sydney in September New Tel was a sponsor
of the Chinese team, in addition to providing the athletes free
telephone services back home to China.
* Marketing in each community's native language.
* Customer service and monthly billing in the relevant native
* Favourable long distance rates to the customer's home country.
* Offering subscription commissions to special interest groups such
as first, second and third tier sports associations and other
cultural and community organisations in return for selling New Tel's
services to their memberships.
In addition to more aggressive marketing, we intend to deploy our
resources to enhance the New Tel network by adding value-added
services to our current customer base here in Australia. This will
increase the revenue per subscriber which will in turn increase our
The mobile telephony market is a natural target for New Tel. Mobile
resale is one of the fastest growing segments of the business, with
licensed service providers such as our company among the principal
Australian mobile market penetration of 40 percent is expected by the
end of calendar year 2000, clearly indicating the ongoing growth
potential of this market. Beginning with the acquisition of G3
Communications' base of 1,500 mobile subscribers in October, 1999,
New Tel's base at 30 June 2000, had reached 6,000.
We now have over 12,000 mobile customers, and at 30 June 2001, we
anticipate a mobile base of 50,000 subscribers. The fixed wire and
mobile base combined would then stand at 120,000.
Through our electronic communications subsidiary, New Tel develops
and commercialises wireless application protocol (WAP) products,
including the MD3000 mobile data terminal and the underground
microcellular communications system, UCELNET. The MD3000 can be
linked with New Tel's GSM service, providing customers with a truly
mobile wireless data capability.
In February 2000, with our business focus shifted to
telecommunications, New Tel spun off as a separate company our engine
technologies unit, Advanced Engine Components Ltd (AEC). Currently we
retain roughly 83 percent of AEC's equity.
In today's world of lightening fast change in business, particularly
in telecommunications, it is sometimes difficult to cut through the
smoke and mirrors and find the real thing. As the Chairman of New Tel
and as your Board of Directors, we are here to confirm to both our
current and future shareholders that New Tel is real.
We have spent the past several years of our lives creating a viable
living business. We're real, we're on the move, and we know exactly
where we're headed in the brave new world of telecommunications.
Among our accomplishments over the past decade, we have raised
A$120.0 million in new capital, including A$80.0 million this year
alone. The funds were employed for development and commercialisation
of leading edge communications products across a range of industries
and international markets.
We have never had more resources available for building our business,
or better opportunities to grow, enhance our revenues, and add
shareholder value. The successes of the past are driving New Tel
In the coming months we plan to raise A$200 million (US$120 million).
The funds will be used for the implementation of our China
agreements, for building our China infrastructure, and for
development of our Australian business base.
As I have already said, a separate shareholder meeting is to be held
shortly to consider this capital raising and other matters relating
to our China project.
In summary, your Board believes the recent flurry of activity,
together with a solid history of accomplishment, demonstrate that New
Tel is real, here to stay, and on the move. We are looking forward to
an exciting twelve months ahead.