Kangaroo Island internet at risk as network talks collapse

Residents of Kangaroo Island have been warned that their internet services may be disrupted due to a threat from a wholesale network supplier to disable all connections.

Swoop Holdings has informed its customers on Kangaroo Island of a potential outage, following a threat by Island Wide, their wholesale network supplier, to turn off all services. Such a move would leave Swoop's local customers without internet access until further notice.

The development comes after negotiations stalled regarding Swoop's potential acquisition of Island Wide, the local network supplier founded by Damon Hagerstrom. Discussions have reportedly failed to reach a satisfactory outcome for both sides, prompting Island Wide to present what Swoop has described as an ultimatum.

"All customers of Swoop Holdings (ASX:SWP) (Swoop), based on Kangaroo Island, off the mainland of South Australia, have today been notified that their internet service may be disrupted. This is due to a threat made by Island Wide Pty Limited (Island Wide), our wholesale network supplier, to disable all services, resulting in outages to our customers at this time," Swoop Holdings said.

"Island Wide's threat has come following a stall in negotiations for the potential acquisition by Swoop of their business. Despite ongoing efforts by us to reach a fair and commercially reasonable agreement, Island Wide (led by founder Damon Hagerstrom), has resorted to this disappointing ultimatum," the company further explained.

"As soon as we became aware of the seriousness of Island Wide's position, we acted immediately, advising affected customers, and exploring alternative solutions with urgency," Swoop Holdings added, saying it had taken immediate action upon learning of Island Wide's position.

"Let us be clear: we will not allow ourselves, or our customers, to be held to ransom. Our priority is, and always will be, the people of Kangaroo Island, who rely on us daily to provide their internet service," Swoop Holdings said, emphasising its commitment to its customers.

The company highlighted ongoing efforts to avoid the threatened disruption. "We are working around the clock to prevent this disruption and appeal to Mr Hagerstrom not to go ahead with the threat. Our Customer Service team is available, via phone and email, for any residents who would like to speak further on the matter."

Swoop Holdings described the situation as "developing," adding, "We remain committed to resolving this matter responsibly, and will provide further updates as new information becomes available."

The dispute raises questions about the future reliability of internet services on Kangaroo Island, where many residents depend on consistent connectivity for both personal and business use. Discussions between Swoop Holdings and Island Wide are ongoing. The outcome will determine whether residents avoid a service interruption.

Swoop Holdings confirmed that its customer service team remains on standby to answer any queries from affected residents as efforts continue to resolve the issue. No formal response from Island Wide or founder Damon Hagerstrom has yet been made public regarding the threatened service disruption and the status of acquisition talks.