Virtual Communities' executive chairman, Ravi Bhatia, said the acquisition of AustarMetro, for "several million dollars," would boost the company's subscriber base from 50,000 to around 70,000, giving it a huge leg-up towards its target of 100,000 subscribers.
Bhatia added that the company would launch a DSL service nationwide "within four to six weeks," but declined to give further details.
John Porter, Austar's chief executive officer, said in a statement his company would retain its core regional Internet business, AustarNet, and continue to deliver bundled Internet and mobile telephony services to the bush with its pay television services.
The move comes amid a flurry of activity in the cash-strapped Australian pay television marketplace as operators look to structure a content-sharing deal that does not attract the ire of the Australian Competition and Consumer Commission. Austar has taken a heavy bath over the past several months, suffering extensive financial losses and restructuring its business to achieve viability.
Porter described the sale as "a logical and strategic step" for Austar. "Since we acquired AustarMetro, we have successfully improved its management and the quality of service provided to customers and, in doing so, have converted it into a profitable operating unit.
"However, Austar's strategy is to focus on offering services to rural and regional Australia and AustarMetro falls outside of this focus".
