NetComm and Mako Networks create strategic partnership with NetAssure

NetComm acquires exclusive Australian rights to Mako Networks

Netcomm Press Release, 10 December 2007

NetComm (ASX: NTC), a provider of broadband hardware solutions, has acquired exclusive rights to operate The Mako Networks System in the Australian market which it will market as the NetAssure service. NetComm has acquired technology and licences in Australia in a deal worth around AU$3 million. An option has also been granted to deploy Netassure solutions throughout Asia (except Japan).

Mako Networks Limited is a New Zealand-based, award-winning developer of a managed VPN broadband service that offers customers enterprise level control of their connection to the internet. The easy to set-up NetAssure solution links sophisticated router devices, which NetComm is licensed to manufacture, and connects a customers' network to a central management system. NetComm or its channel partners will provide comprehensive remote monitoring and management services, controlling access to multiple sites through a web console.

’The service acts as an intelligent, customisable, all-in-one router, web filter and firewall that is remotely managed by NetComm. It is a total network management and security system’ said David Stewart, Managing Director of NetComm.

The solution is ideal for small to large organisations especially those multiple offices or stores such as franchises and retail networks or where shared access by clients or suppliers is required. Clients pay a monthly service fee for the device and service rather than buying a box outright. The new service is part of NetComm's transition from being simply a manufacturer of hardware and will provide recurring revenue streams.

’The solution has been a success in the New Zealand market in the small to medium business sector as it has proven to be more appropriate than the expensive enterprise level solutions offered by the large global monoliths,’ said Stewart. ’Telecom NZ has been the key reseller of this service in New Zealand under their own label 'SecureMe', selling thousands of solutions per year with particular success in the Health Sector connecting pharmacies and GPs to the Ministry of Health Network.

The AU$3 million transaction will be funded by NetComm using a combination of cash and scrip. Settlement will be by instalments from the execution of the binding agreement through to December 2008 with two tranches of stock valued at AUD0.10 and 0.15 per share respectively.

Terry Winters, Chairman of NetComm, considers the deal significant for three reasons. ’First, NetComm has secured the rights to an exciting new solution. The NetAssure solution is extremely complementary to NetComm's current offerings and leverages both the existing skills sets and sales channels. Second, this is a significant first step in the strategic plan to reposition NetComm as a provider of high value services. Finally, Netassure's commitment to taking a significant stake in NetComm, at a price above current market, underlines their confidence in the prospects of our company.’

’Mako Networks is thrilled to be working so closely with NetComm,’ said chief executive Bill Farmer. ’We are proud to do this deal and have faith that it will build on our international sales success.’