Tortuous VoIP Launch Nears

The award for the most publicly troublesome VoIP service launch in the Australian market for 2006 must surely go to Adelaide-based ISP, Chariot.

We have no idea how the implementation has gone technically, but the corporate machinations that lead up to the launch of Chariot’s VoIP service have been worth more than one mention on this web site.

The company has announced to the ASX that its IP Telephony service will go live on 30 August, but the company’s public profile and its business has suffered greatly in the lead up.

First off it was revealed that erstwhile partner Transcom International was taking Chariot to court over what it alleges was a failure to fulfil contractual obligations to fund the local Transcom start-up in Queensland.

The legal bun fight looked like getting nasty as the media spotlight was turned on the court process. In response, Chariot announced it would roll-out a VoIP service without using Transcom as a partner, which still plans to do.

But at the same time it seemed the spotlight reminded ASIC that it had unfinished business with Chariot MD, Robert Horlin-Smith. ASCI pressed charges against Horlin-Smith over what it claims were some dubious dealings during an earlier life in the Wine Industry and he ultimately resigned to face the charges away from Chariot’s Broad Room.

A new CEO was anointed, Financial Director Garry Hersey was promoted to the position and soon after announced a restructure of the company’s operations “to improve its on-going performance and financial position”.

The restructure involved centralising the branch network and closing nine offices in Victoria, NSW and Queensland and leaving three regional centres located in Adelaide, Ballarat and the Gold Cost.

This meant that 48 permanent and casual staff were retrenched at an estimated saving of more than A$1 million net pre-tax in the current fiscal year and A$1.3 million annually thereafter.

At the time, Hersey said: “going forward, our focus is very much on organic growth and operational improvement. Building on what we have is the core thought process for us now.”

“The company’s ability to lead the market is being stifled by its overhead structure and the cost of debt used by the company to acquire businesses over the past few years,” he said.

“Our existing office network is primarily a consequence of that previous acquisition program and we are in effect completing the integration of those businesses into Chariot.

The centralisation followed a debt restructure back in June, before the company’s troubles became fodder for the media.

Chariot will initially try to sell the VoIP services to its existing ISP user base starting with those who have already registered their interest in the new service.

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