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$13.5m cash boost for 2Degrees

Wednesday 1st September 2010

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Overseas shareholders in 2Degrees Mobile have ponied up more cash to help fund the nation's third, and newest, mobile phone network operator's investment in infrastructure.

Major shareholders Trilogy International New Zealand and Tesbrit, and founder Tex Edwards' KLR Hong Kong bought 18 million shares at 75 US cents apiece to inject US$13.5 million into the company, according to documents lodged with the Companies Office. That's on top the US$7.5 million Trilogy and Tesbrit put into the company in May.

"It's essentially for the ongoing capital requirements to fund investment in infrastructure - we've got our new 3G to roll out," said Bryony Hilless, corporate communications manager.

The injection wasn't related to the expected $52 million loss in the nine months through December 2010, she said.

The injection further dilutes Hautaki Trust's share in the phone company to 11.4%. 2Degrees grew out of a controversial government decision 10 years ago to give Maori the right to buy a third generation radio spectrum frequency at a discounted price.

The phone company entered the market last year and managed to secure 206,000 customers, or 4.5% of the market in its first six months. Since then, growth has slowed, with the number of customers switching from dominant rivals Telecom and Vodafone New Zealand rising to 92,000 last month from 83,000 in July. In February, when 2Degrees announced its customer number, it had secured 53,000 people from its competitors.

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