Open Telecommunications

Open Telecommunications Ltd. was an Australian software company serving telecommunications operators, equipment manufacturers, and communications-service providers. Founded in late 1995 in North Sydney by Wayne Passlow, the company was established by software developers who had worked at Telstra and Optus. Passlow, who became the company’s managing director, had previously been a sales manager for Sun Microsystems in Australasia. The business focused on software and infrastructure rather than consumer telephone or mobile services. Its product and service portfolio was described as a new generation of telecommunications network infrastructure. This included switching products, content and related services, and systems used to manage telecommunications networks. The company’s technology was intended to support the operational and service layers required by telecommunications businesses, placing Open Telecommunications within the enterprise telecommunications-software and network-infrastructure segment. Open Telecommunications expanded through acquisitions during the late 1990s and early 2000s. In August 1999 it acquired the Australian network-management business of Siemens Research, a Melbourne-based unit of Siemens. In March 2000 it completed the acquisition of Indian Pacific Communications, a developer of wireless telecommunications software. These transactions broadened the company’s capabilities and helped it present itself as a provider of integrated telecommunications systems rather than a narrow software vendor. The company also developed a substantial customer and partner network. At its peak, Open Tel said that it served customers across five continents. Reported customers and clients included Samsung and LG Electronics in South Korea, telecommunications companies in the Netherlands, the United States, and Peru, and Australian operators such as Optus, One.Tel, and COMindico. COMindico was also founded by Wayne Passlow. Open Telecommunications received financial and technological support from Cisco Systems, while investors James Packer and Lachlan Murdoch were among the prominent backers associated with the company and with the similarly defunct Australian telecommunications venture One.Tel. Open Telecommunications became a public company on the Australian Stock Exchange and attracted attention for a very strong first-day share-price performance, with the stock rising by more than four times its initial public-offer price. The company’s fortunes deteriorated after the telecommunications and technology-market downturn that began in 2000. Although contemporary accounts contrasted its decline with One.Tel’s management problems and attributed Open Telecommunications’ difficulties more substantially to adverse market conditions, the company ultimately entered voluntary administration in April 2002. Its securities were suspended on the ASX on 30 April 2002, when the shares were reported to be trading at five cents. The company later returned to trading on 3 February 2004. On 30 March 2005, Wayne Passlow and Macquarie Bank announced a proposed privatisation valued at approximately A$7 million. The transaction faced opposition from then-largest shareholder Gordon Martin, but it ultimately proceeded. In August 2005 Open Telecommunications announced that Passlow would step down as chief executive. Macquarie later announced in May 2006 that the business had been rebranded as S2Net. Open Telecommunications was delisted in 2006 and is no longer an operating brand.

Open Telecommunications began in late 1995 in North Sydney, Australia, as a private software company founded by Wayne Passlow. Its early team included software developers with experience at Telstra and Optus, two major Australian telecommunications businesses. Passlow served as managing director and brought prior commercial experience from his role as a Sun Microsystems sales manager in Australasia. From the outset, Open Telecommunications concentrated on the systems behind telecommunications services rather than selling communications services directly to consumers. The company described its offering as telecommunications network infrastructure for a new generation of operators and service providers. Its activities covered switching products, content and service systems, and network-management technology. This placed it at the intersection of telecommunications equipment, carrier software, and operational-support systems. Its customers and technology relationships extended beyond Australia. At its peak, the company claimed customers on five continents, including Samsung and LG Electronics in South Korea, operators in the Netherlands, the United States, and Peru, and Australian businesses including Optus, One.Tel, and COMindico. COMindico was another telecommunications company founded by Passlow. Open Telecommunications pursued expansion through acquisitions. In August 1999 it bought the Australian network-management business unit of Siemens Research, based in Melbourne. The transaction added network-management expertise associated with a major international technology group. In March 2000 the company completed the acquisition of Indian Pacific Communications, a wireless telecommunications software developer. Together, these moves broadened the company’s technical scope across network operations and wireless communications. The business also attracted influential financial and strategic support. Cisco Systems provided financial and technological backing, while James Packer and Lachlan Murdoch were among the investors associated with Open Telecommunications. The company was often discussed alongside One.Tel because the two ventures shared prominent backers and both ultimately failed. Open Telecommunications became a public company on the Australian Stock Exchange and drew attention when its shares rose by more than four times the initial public-offer price on the first day of trading. The market environment changed sharply after the technology and telecommunications downturn began in 2000. Open Telecommunications’ decline was generally characterized as a consequence of unfavorable market conditions rather than the type of management failures often attributed to One.Tel. Nevertheless, the deterioration led to voluntary administration in April 2002. The company’s securities were suspended from ASX trading on 30 April 2002, with the shares reported to be trading at five cents. Trading was later reinstated on 3 February 2004. In 2005, founder Wayne Passlow partnered with Macquarie Bank in a proposal to privatise Open Telecommunications at an estimated cost of A$7 million. The proposed transaction encountered resistance from Gordon Martin, then the company’s largest shareholder, but the acquisition ultimately succeeded. Open Telecommunications announced in August 2005 that Passlow would step down as chief executive. In May 2006, Macquarie announced that the company had been rebranded as S2Net. Open Telecommunications was delisted in 2006 and is now defunct. The available record therefore presents the company as an example of an Australian telecommunications-software venture whose technical and international ambitions were curtailed by the severe market conditions of the early 2000s.

1. 2006Rebranded and delisted

   The business was rebranded as S2Net and Open Telecommunications was delisted from the ASX.

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2. 2005Privatisation proposal announced

   Wayne Passlow and Macquarie Bank announced a proposed privatisation estimated at A$7 million.

   Source
3. 2004Trading reinstated

   The company's securities returned to ASX trading on 3 February.

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4. 2002Voluntary administration and ASX suspension

   Open Telecommunications entered voluntary administration, and its securities were suspended from the ASX on 30 April.

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5. 2000Indian Pacific Communications acquisition completed

   The company completed the purchase of wireless telecommunications software developer Indian Pacific Communications.

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6. 1999Siemens Research business acquired

   Open Telecommunications acquired Siemens Research's Australian network-management business unit in Melbourne.

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7. 1995Company founded in North Sydney

   Wayne Passlow founded Open Telecommunications as a private Australian software company with a team that included former Telstra and Optus developers.

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An enterprise telecommunications-software and network-infrastructure provider for carriers, telecommunications operators, and communications-equipment companies.

• Telecommunications network infrastructureTelecommunications software and infrastructure

  Open Telecommunications supplied software and related services intended to support telecommunications network infrastructure. The offering was aimed at operators and communications businesses that needed systems connecting network operations, service delivery, and infrastructure management.

• Switching productsTelecommunications switching

  Switching products formed one part of the company's infrastructure portfolio. They were associated with the routing and handling of telecommunications traffic within operator networks, although the available reference material does not identify individual product names or technical specifications.

• Network-management systemsNetwork management software1999

  The company developed and supplied systems for managing telecommunications networks. This capability was strengthened by the 1999 acquisition of Siemens Research's Australian network-management business unit.

• Wireless telecommunications softwareWireless telecommunications software2000

  Open Telecommunications added wireless telecommunications software capabilities through its March 2000 acquisition of Indian Pacific Communications. The reference material does not provide the individual names or specifications of the acquired products.

• Content and service systemsTelecommunications service platforms

  Content and services were included among the company’s broader telecommunications infrastructure activities. These systems complemented its switching and management offerings, supporting the service layer used by telecommunications operators and related businesses.

• 2006Rebrand the business as S2NetStrategy

  Following the privatisation process, Macquarie sought to reposition the former Open Telecommunications business.

  What changed. The company was rebranded as S2Net.

  Aftermath. Open Telecommunications ceased to exist as a listed brand and was delisted in 2006.

  Source
• 2005Privatise the company with Macquarie BankM&A

  After the company’s financial difficulties and public-market disruption, Wayne Passlow and Macquarie Bank proposed taking Open Telecommunications private.

  What changed. The parties announced a proposed privatisation estimated at A$7 million. The transaction faced opposition from major shareholder Gordon Martin but ultimately succeeded.

  Aftermath. Open Telecommunications was subsequently rebranded as S2Net and delisted in 2006.

  Estimated privatisation cost. (2005)

  Source
• 2002Enter voluntary administrationStrategy

  The company faced deteriorating conditions in the telecommunications and technology markets after the downturn that began in 2000.

  What changed. Open Telecommunications entered voluntary administration in April 2002, and its ASX securities were suspended on 30 April.

  Aftermath. The company later returned to trading in 2004, but ultimately underwent privatisation, rebranding, and delisting.

  Source
• 2000Acquire Indian Pacific CommunicationsM&A

  The company pursued additional wireless telecommunications software capabilities.

  What changed. Open Telecommunications completed the acquisition of Indian Pacific Communications in March 2000.

  Aftermath. The transaction added wireless telecommunications software to the company’s portfolio.

  Source
• 1999Acquire Siemens Research's Australian network-management businessM&A

  Open Telecommunications sought to expand its network-management capabilities and telecommunications software portfolio.

  What changed. The company acquired the Australian network-management business unit of Siemens Research in August 1999.

  Aftermath. The acquisition broadened the company’s infrastructure and network-operations offering.

  Source

• 2006Open Telecommunications rebranded as S2Net

  Macquarie announced that the company had been rebranded as S2Net. Open Telecommunications was subsequently delisted in 2006.

  Leadership change
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• 2005Wayne Passlow partners with Macquarie Bank to privatise Open Telecommunications

  Passlow and Macquarie Bank announced a proposal to take Open Telecommunications private at an estimated cost of A$7 million. The proposal faced opposition from major shareholder Gordon Martin before ultimately succeeding.

  M&A
  Source
• 2005Open Telecommunications announces chief executive transition

  The company announced in August that founder Wayne Passlow would stand down as chief executive.

  Leadership change
  Source
• 2004Open Telecommunications returns to the ASX

  Trading in Open Telecommunications securities was reinstated on 3 February 2004 after the earlier suspension.

  Other
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• 2002Open Telecommunications shares suspended amid voluntary administration

  Open Telecommunications entered voluntary administration in April 2002. Its ASX securities were suspended on 30 April, with the shares reported at five cents.

  Bankruptcy
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• 2000Open Telecommunications completes Indian Pacific Communications acquisition

  The company completed the acquisition of Indian Pacific Communications, a wireless telecommunications software developer.

  M&A
  Source
• 1999Open Telecommunications acquires Siemens Research's Australian network-management business

  Open Telecommunications acquired the Australian network-management business of Siemens Research, located in Melbourne, expanding its telecommunications management capabilities.

  M&A
  Source

1. Open Telecommunications
2. Open Telecommunications returns to the ASX
3. Archive Research