Ionica Plc, the Cambridge-based radio telephony company which connected its first UK customers in May 1996 (CI No 2,913), is to float simultaneously on the Nasdaq and main London stock exchanges. It hopes to raise around 120m pounds by placing 25% of its stock as newly issued shares. The company will have an estimated post flotation value of around 600m pounds. Ionica is shaping up to take on British Telecommunications Plc in the residential and small business market by using a vastly different technology, developed with its Canadian partner Northern Telecom Ltd. Digital radio is used to connect customers to a local base station via a roof mounted aerial. The base station relays the call to an Ionica exchange, which takes the call to any destination in the world. Ionica needs the new funding to expand its network. It wants to offer its services to 80% of homes in the UK by 2001. Call tariff’s will consistently shadow British Telecom’s rates, undercutting its rival by up to 20%. In this way the company hopes to avoid confusing the consumer, while riding on the back of British Telecom’s huge marketing spend. Ionica claims to have connected 22,000 customers to date representing a penetration of 2.5% in targeted regions. The roll out of new base stations will cover all areas, regardless of whether the big cable franchises of Telewest Communications Plc and Cable & Wireless Communications Plc are there or not. Ionica estimates that 70% of homes in the UK currently have no alternative to British Telecom anyway. In its last financial year to March 31 revenues totaled 14.9m pounds but the loss for the year was a whopping 43.9m pounds. Trading is expected to commence in mid July with SBC Warburg acting as sponsor to and global co-ordinator of the flotation.
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