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Rocom sees cost benefits from new business

By Phil Boeyen, ShareChat Business News Editor

Thursday 30th August 2001

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Rocom Wireless (NZSE: ROC) believes it has realised cost benefits of up to $3 million in the acquisition of a packet billing system from Newcall (NZSE: NGL).

The purchase, announced in late June, will see Rocom issue 400,000 shares at 50 cents as payment.

Rocom's directors claim the purchase provides significant shareholder cost benefits, in the region of $2-3 million. It says the estimate is supported by a PricewaterhouseCoopers valuation of the system at $3 million.

Rocom says it bought the Newcall system to help manage increased customer demand for satellite products and subsequent airtime billed, and since the deal was announced customers have shown an encouraging amount of interest in using the system

"The system will also meet additional demand in application billing services over the new Telecom CDMA network." Rocom says.

The agreement provides Rocom Wireless with exclusive use of the system in NZ and a non -exclusive license in Australia. It plans to run the billing system as a standalone company and says it will shortly announce the new company's name and chief executive.

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