TalNet struggles as US parent hits hard times

Auckland-based wireless communications company TalNet, which showed great promise when it launched in February, has hit hard times, forcing it to cut its staff numbers from seven to two people. TalNet's US parent company, Tal Wireless Networks, has filed for Chapter 11 bankruptcy proceedings and is hoping to trade its way out of financial difficulties. This has left Tal's subsidiaries in New Zealand, Australia, Alaska, the Philippines and Argentina in limbo. Last month former TalNet managing director Greg Cross sent letters to TalNet's 35 customers saying the New Zealand operation would be "scaled back".

Auckland-based wireless communications company TalNet, which showed great promise when it launched in February, has hit hard times, forcing it to cut its staff numbers from seven to two people.

TalNet’s US parent company, Tal Wireless Networks, has filed for Chapter 11 bankruptcy proceedings and is hoping to trade its way out of financial difficulties.

This has left Tal’s subsidiaries in New Zealand, Australia, Alaska, the Philippines and Argentina in limbo.

Last month former TalNet managing director Greg Cross sent letters to TalNet’s 35 customers saying the New Zealand operation would be “scaled back”.

Tal Wireless Networks director Tim Todhunter says several parties have approached the company with a view to investment. Tal ran into trouble following a reverse takeover by California-based American Phoenix last November. It later turned out that American Phoenix could not come up with the cash.

Only nine months ago TalNet started out in Auckland with high hopes. Former Microsoft New Zealand general manager Greg Cross was appointed managing director and the company started building its Auckland network in February.

Using equipment from Tal Wireless Networks to offer TCP/IP networking at up to 450Kbit/s to any user site within 30km of its base station, TalNet planned to have coverage from Albany in the north to Manukau in the south. It had 18 rooftop stations in Auckland and was negotiating space on the Sky Tower and planned to expand to 15 other cities, starting with Wellington. The big attraction for customers was pricing: rates for a dedicated 64Kbit/s link started at $199 a month excluding GST.

Despite the financial troubles TalNet is still operating in New Zealand, and customer reaction is mixed. Mark Derricutt, software engineer of DesignPower Genzl, is critical of TalNet’s service, which he says never ran at the speeds promised. DesignPower Genzl joined TalNet in March because it wanted a dedicated link to its ISP, ICONZ.

However, it was about a month before it got connected, due to various problems with Talnet and ICONZ. Since then it has had regular routing problems with all outgoing traffic being routed via Voyager and Australia.

About three weeks ago all traffic stopped on its Talnet wireless connection Three days later DesignPower Genzl unplugged the routers and set up an NT 4 workstation to act as a router and opened a temporary dial-up connection to ICONZ. Derricutt says frequent calls to TalNet have gone unanswered and he is still waiting for TalNet to remove its routers and the installed aerials from the building.

On a more positive note Deloitte & Touche ISC division, which uses TalNet to link its office in Auckland’s CBD to its ISP, Voyager, has had no problems and is still using the service. Shane Hanson, ICS’s IT administrator, says TalNet has kept him informed of the company’s financial problems.

“We got the letter saying the company would be slowing down until it could find a way out, and [former boss] Greg Cross rang to say TalNet was looking for financial assistance. Our links are still operating and they’re still billing us. We haven’t needed any support since the day they set it up. I think it would be really sad if they have to close down. It’s a great system.”

Auckland distributor Sealcorp, another TalNet customer, has yet to feel any impact from TalNet’s situation. Mike Ridgway, who runs Sealcorp’s parent company Brocker Investments, says he is not worried.

“I would have thought that had it become an issue it would have been brought to my attention. We got a letter from Greg Cross saying he wasn’t working with DesignPower Genzl on a full-time basis any more but I’m not worried.

“There is the risk that the service won’t continue but at the same time in the big world of risks and threats that we face in our volatile industry it doesn’t really get on the register.”

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