Telstra (ASX: TLS.AX) on Wednesday announced that it is acquiring South Australian competitive broadband provider Adam Internet for an undisclosed amount.
Although the proposed acquisition still has to get final approval from the Australian Competition and Consumer Commission (ACCC), the telco will purchase all of Adam's business including the CLEC's Adelaide data center and fiber network assets.
Telstra said it plans to retain the Adam brand and run the company as a standalone subsidiary, and will use its own network assets to expand the South Australian business on a national basis.
When the deal is completed, Telstra will retain the Adam Internet brand and run it as a separate company unit. In addition, Telstra will maintain Adam's current staff.
Kate McKenzie, Telstra's Innovation Products and Marketing Group Managing Director, said that Adam's "low cost business that lets customers purchase and manage their own services" is a model that "offers opportunities for growth, particularly for consumers wanting online sales and support."
The acquisition poses potential benefits to both Telstra and Adam Internet.
Telstra will be able to expand its own set of broadband services through a well-established brand serving Southern Australia. Adam Internet, which got its start as a bulletin board service in the mid-1980s, has established itself as a well-known ISP brand providing a mix of copper-based ADSL and ADSL2+, FTTH, mobile, and WiMAX broadband services.
Meanwhile, Adam Internet will have the financial and network backing of a large incumbent telco that can quickly expand its national presence.
- see the release
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