Internet shake-up looms on PIPE sale

Unlimited internet download packages could become more common after shareholders of telecommunications infrastructure owner PIPE Networks Ltd voted to accepted a $373 million takeover offer by TPG Telecom Ltd.

PIPE said its shareholders had met and accepted the $6.30-a-share bid on the basis that the proposed scheme of arrangement was approved by the Queensland Supreme Court.

The takeover could herald moves by TPG to offer unlimited internet download packages and other companies may be pressured to follow suit, said Ovum telecommunications research company analyst Nathan Burley.

PIPE owns so-called "dark fibre" that connects major cities and owns Australia's largest internet exchange.

"This purchase, the driver behind it is to get more scale and better purchasing options for a lot of backhaul assets, to allow them (TPG) to offer bigger data caps and potentially unlimited broadband services," Mr Burley said.

Mr Burley said the takeover had the potential to shake-up the internet packages on offer in Australia, depending on how expensive they were.

Shares in TPG soared after a trading halt was lifted following the shareholders' vote.

The stock rose as high as $1.995 cents, or 14 per cent, before slipping back to close up 11.14 per cent, or 19.5 cents, to $1.945.

Mr Burley said there had been a lot of consolidation in the Australian broadband industry.

"A lot of that has been driven by the fact that people need scale and they need scale to help with purchasing power and these sort of things," Mr Burley said.

"This is one area where TPG potentially will have a competitive advantage."

Shares in PIPE Networks closed up 12 cents at $6.27.

PIPE said it expected that March 17 would be its last day of trading on the stock exchange, subject to the court approval.

TPG was formerly called SP Telemedia Ltd and in 2008 acquired all interest in TPG Holdings Ltd and joined the brand the TPG and Soul, SP Telemedia's wholly owned subsidiary.