OpenTel casts cloud over Australian telecom market

Australia’s attempts to develop a vibrant information and communication technology (ICT) market took a further blow Wednesday when Open Telecommunications Ltd. (OpenTel) announced the resignation of Managing Director and Chief Executive Officer Colin Chandler and Chief Financial Officer Shane Hodson.

Both executive roles will be filled by company founder and Chairman Wayne Passlow, OpenTel said in an announcement to the Australian Stock Exchange (ASX).

Sydney-based OpenTel provides monitoring and management products for network operators and telecommunication carriers, two industries which are in financial difficulties worldwide.

The resignations come three weeks after the company requested a halt to trading of its shares on the ASX on the grounds that a dispute with one of its customers could have material but unpredictable effects on its share price.

Local media Web sites have suggested that an OpenTel customer, a new carrier called Comindico, is demanding a A$4 million (US$2.2 million) repayment for below-par services and that the setback may spell the end for OpenTel.

OpenTel’s flagship product OpenCI is an Operations Support System (OSS) designed to help operators with service configuration, network provisioning, reporting and capacity management.

The company was valued at more than A$2 billion at its peak, but its 615 million shares are now quoted on the ASX at A$0.05 each, valuing the company at just over A$30 million.

In April, the company laid off 77 of its staff and closed offices in Australia, New Zealand, the U.K. and the Netherlands.

The problems at OpenTel follow the high-profile crash of consumer telecommunication company One.Tel Ltd., which failed in May last year owing upward of A$600 million to equipment providers and other creditors. Another second-tier carrier, Dingo Blue, will close at the end of June after losing A$45 million in the past year, leaving 68,000 customers without a carrier.

According to independent telecommunication analyst Paul Budde, Australia had 11 main carriers in 1999, a figure which dropped to nine in 2000 and which by the end of this year may be only three or four. As the number of carriers declines, so do the opportunities for vendors selling into the carrier market.

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