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Australia - Telco Company Profiles - 2nd Tier


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Australia - Telco Company Profiles - 2nd Tier

Enormous Market Consolidation Continues in the 2nd Tier Market

Developments in this market have been dominated by industry consolidation, a process that is set to continue over coming years. Moving towards a structurally separated regulatory environment with a NBN at the horizon, size really does matter. The second tier market continues to grow strongly, in particular from Vocus and TPG, both of which continue to grow through increased scale via mergers and acquisitions. The market reached approaching $5 billion in 2016 with an annual growth rate of over 10% Growth is anticipated to subside over the next year due to market consolidation and a maturing market.

The Vocus / Merger with M2 creates Australias fourth-largest telecommunications company and the third-largest in New Zealand. It sees a welcome strengthening of the competitive environment in Australia. The telecoms market has developed more and more into a utilities market, and in such markets size matters. It will allow the combined entity to be more efficient and more effective.

While the TPG/iiNet merger brought two similar companies together, and as such potentially reduced the number of players in the market, the Vocus/M2 combination brings two different companies together – one operating in the business market and one operating in the retail market. This will allow the companies to share resources and attract better deals from the various ICT (wholesale) providers they do business with.

TPG Telecom (iiNet)

TPG Telecom Limited provides telecoms and multimedia services in the Australian marketplace. In August 2015 TPG acquired local ISP iiNet. TPG is now Australias second-biggest provider of fixed-line broadband in Australia with over 1.7 million customers. Services including voice, internet and data solutions are provided to a customer base ranging from the consumer market through to small and medium enterprises, corporate and government sectors. The company also owns a cloud-hosting company and the PIPE network infrastructure that includes the third largest domestic dark-fibre operation and the submarine cable network to Guam, Asia and the United States.

The company is delivering an extensive FttB service to apartment buildings in capital cities, offering broadband at 100Mb/s at a price which undercuts existing offers from rival ISPs. TPG has also secured spectrum in the 2.5GHz band to bolster its wireless broadband capabilities, and has committed to investing in additional capacity on the subsea cable linking to New Zealand and the US West Coast.

The company has the largest data network and voice network after Telstra, the largest fully converged voice, video and data IP-based access network in regional Australia, and the largest voice-enabled IP network. The company’s capabilities and reach were enhanced following its $450 million acquisition of AAPT’s wholesale and business services from Telecom New Zealand, completed in February 2014.

In 2015 TPG created a new retail arm to sell its wholesale fibre-to-the-basement product to residential customers. TPG is also active in New Zealand where it is eying potential acquisitions, both Vodafone New Zealand and 2 Degrees have been rumoured to be on the company’s hit list. Also late 2016 TPG made a surprise move TPG to become a fourth player in the Singapore mobile market.

Vocus (M2)

Vocus is an Australian based telecommunications provider with offices in Australia and New Zealand. Its services include co-location, internet, voice, fibre and ethernet services. Vocus merged with M2 Communications in 2016 and acquired Amcom in 2015, a second-tier telecommunications carrier providing fibre, cloud services, IP voice solutions, broadband, data centre, and internet services to corporate and government.Vocus’ core business centres around its carrier-grade fibre network. Services include dark fibre access, data centre services, IP Transit, Ethernet, wholesale DSL, wholesale voice and internet peering.

The Vocus / Merger with M2 creates Australias fourth-largest telecommunications company and the third-largest in New Zealand. It sees a welcome strengthening of the competitive environment in Australia. The telecoms market has developed more and more into a utilities market, and in such markets size matters. It will allow the combined entity to be more efficient and more effective. The financial results of the telcos now all depend on who is the most cost-effective. They are both entrepreneurial companies and so they will be able to bring innovative new products and services to the market at attractive prices. Vocus’ acquisition of Nextgen Networks in June 2016, will seriously lift its position as an infrastructure based telco. The acquisition is the next and perhaps final part of a the company’s strategic plan that has also seen his firm expand geographically with the previous acquisition of Amcom and FX Networks, and diversify into the consumer space via its merger with M2.

While the TPG/iiNet merger brought two similar companies together, and as such potentially reduced the number of players in the market, the Vocus/M2 combination brings two different companies together – one operating in the business market and one operating in the retail market. This will allow the companies to share resources and attract better deals from the various ICT (wholesale) providers they do business with.

Nextgen Networks

Nextgen Networks (Nextgen) is a licensed telecommunications carrier and the company specialises in data services for carriers, service providers, government and corporations. The company was also awarded an RSP license for the NBN Co trial areas. Nextgen owns and operates one of Australia’s largest national fibre networks, of over 19,000km of fibre rings. It also operates data centre assets in all capital cities. A majority share of Leighton Holdings’ telecom assets was sold in mid-2013 to a Canadian pension fund, and was subsequently rebranded as Nextgen Group Holdings.The fibre network runs between the country’s principal capital cities of Brisbane, Sydney, Melbourne, Adelaide, Perth and Darwin and has links to nodes in regional cities and centres. The company has an extensive national Virtual Private LAN Service switched data network, the first such in Australia. The VPLS network allowed the company to become a full data service provider to the broader Australian market.

Nextgen has rolled out around 6,000km of a fibre backhaul link to Darwin, which it manages on behalf of NBN Co as part of the Regional Backbone Blackspots Program. The Perth-Singapore submarine cable, being managed by Nextgen’s subsidiary ASC International, secured landing permits in early 2014, so enabling the operator to proceed with the construction phase. In June 2016 Vocus Communications confirmed the $807 million acquisition of Nextgen.

Macquarie Telecom

Macquarie Telecom is an integrated telco providing a full range of hosting, data, voice and mobile services to the business and government market. It also offers a range of cloud services including security, storage, backup-as-a-service and virtual hosting / data centre services. Established in 1992, Macquarie Telecom was one of the first telecommunication providers of the deregulated era and successfully publicly listed on the Australian Securities Exchange in late 1999. Macquarie’s two key target markets are Australian mid-size corporates and the government sector. A third data centre, in Canberra bolstered the company’s hosting and cloud-based services, which remain the main focus of its strategy for growth. Macquarie Telecom sold its Intellicentre 2 datacentre to Keppel DC, a Singapore real estate investment trust. In 2016 Macquarie Telecom created three new brands: Macquarie Telecom, focused on mid-large sized business customers; Macquarie Cloud Services, focussed on tech businesses and Digi SaaS customers; and Macquarie Government, focussed on cyber security and cloud for Government customers.


  • EXECUTIVE SUMMARY
  • REVENUE STATISTICS - 2ND TIER
    • TOTAL MARKET BY MAJOR PLAYERS AND TOTAL REVENUE
      • Table Second-tier telcos - total revenue ($ million) and annual change - 2010 - 2017
      • Table Second-tier telcos - revenue ($ million) by major provider - 2014 - 2016
      • Table Second-tier telcos - revenue by major provider - annual change - 2015 - 2016
      • Table Second-tier telcos - Revenue Market Share revenue by major provider - 2016
      • Table Historic - Second-tier telcos - revenue by provider - 2010 - 2014
      • Table Historic - Second-tier telcos - revenue by major provider - annual change - 2010 - 2014
      • Table Historic - Second-tier telcos - revenue by major provider - relative market shares - 2010 – 2014
      • Table Historic - Second-tier telcos - revenue by provider (historic) - 2004 - 2007
      • Table Historic - Second-tier telcos - revenue by major provider - relative market shares - 2004 – 2007
    • OPERATOR DATA INTO 2016
      • TPG
        • Table TPG revenue and annual change - 2001 - 2016
        • Table TPG consumer - revenue breakdown by market segment (consumer) - 2010 - 2016
        • Table TPG - revenue ($ million) breakdown by division - 2009 - 2016
      • iiNet
        • Table iiNet total revenue - 2004 - 2016
        • Table iiNet - revenue breakdown by market segment - 2015 - 2016
        • Table iiNet key financial statistics - 2007 - 2016
      • Vocus
        • Table Vocus key financial parameters - 2016
      • Macquarie Telecom
        • Table Macquarie key financial indicators - 2008 - 2016
        • Table Macquarie revenue by division - 2015 - 2016
  • IINET
    • COMPANY INFORMATION
      • Overview
        • Table iiNet Limited (iiNet) at a glance
      • Change of Ownership
    • FINANCIAL RESULTS
      • Year 2016
        • Table iiNet total revenue - 2004 - 2016
        • Table iiNet - revenue breakdown by market segment - 2015 - 2016
        • Table iiNet key financial statistics - 2007 - 2016
        • Table iiNet ARPU by service - 2008 - 2014
      • Year 2015
      • Year 2014
      • Year 2013
      • Year 2012
      • Year 2011
        • Table iiNet total revenue (historic) - 1997 - 2003
    • OPERATING RESULTS
      • Subscriber statistics
        • Table iiNet - Broadband Subscribers (thousands) by Product - 2015 - 2016
        • Table Historic - iiNet active subscribers - 1997 - 2004
        • Table Historic - iiNet active subscribers - 2005 - 2015
        • Table iiNet internet subscribers by type - 2007 - 2014
        • Table iiNet voice subscribers by type - 2007 - 2014
    • COMPANY ANALYSIS
    • NETWORK
      • Overview
      • DSLAM rollout
        • Table iiNet DSLAM exchanges - 2009; 2011 - 2012
      • Dark fibre
      • Fibre-to-the-Premises (FttP)
      • iiNet's plans for undersea network expansion taking shape
      • WiFi rollouts in Melbourne
    • ACQUISITIONS, ALLIANCES AND SUBSIDIARY COMPANIES
      • Acquisition overview
        • Table iiNet's acquisitions - 2003 - 2014
      • Partnership with Polycom
      • Acquisition of ISP Westnet
      • Alliance with FOX Sports
      • Alliance with Hypernia
      • Alliance with Hybrid Television Services
      • Alliance with Hutchison
      • Amcom and PowerTel acquire stake in iiNet
      • Partnership with FetchTV
      • Acquisition of AAPT Consumer Division
      • Acquisition of Supernerd
      • Acquisition of TransACT
        • Table TransACT Communications Pty Ltd (TransACT) at a glance - 2011
        • Table Network FttK coverage
        • Table TransACT brief company history
      • Acquisition of Internode
        • Table Internode Pty Limited (Internode) at a glance - 2012
        • Table Internode ADSL2+ statistical overview - 2006 - 2012
        • Table Internode brief company history
      • Acquisition of Adam Internet
      • Acquisition of Tech2
      • Partnership with Allseen
    • PRODUCTS AND SERVICES
      • Home and SOHO
      • Business
        • Table iiNet business revenue - 2009 - 2014
      • Reselling agreements
    • COMPANY HISTORY
      • Brief timeline - 1993 - 2016
  • MACQUARIE TELECOM
    • COMPANY INFORMATION
      • Overview
        • Table Macquarie Telecom (Macquarie) at a glance
    • FINANCIAL RESULTS
      • FY 2016
        • Table Macquarie key financial indicators - 2008 - 2016
        • Table Macquarie revenue by division - 2015 - 2016
      • FY 2015
        • Table Macquarie revenue by division - 2004 - 2015
      • FY 2014
      • FY 2013
      • FY 2012
      • FY 2011
      • Historical Operating revenues and statistical overview
        • Table Historic - Macquarie revenue by division - 2004 - 2014
        • Table Historic - Macquarie - annual change in revenue by division - 2005 - 2014
        • Table Historic - Macquarie - revenue contribution by division - 2004 - 2014
    • COMPANY ANALYSIS
      • Leader in managed business services
      • National Broadband Network (NBN)
    • DATA NETWORK
      • Metro Access Network (MAN)
      • Mobile network
      • Partnership with Tata Communications
    • SERVICES
      • Hosting solutions
      • Telco
      • Data centres
      • Macquarie Telecom Enterprise Cloud
    • COMPANY HISTORY
      • Brief timeline - 1992 - 2016
  • NEXTGEN NETWORKS
    • COMPANY INFORMATION
      • Overview
        • Table Nextgen Networks Pty Limited (Nextgen Group Holdings) at a glance
      • Background information on company ownership
      • Vocus set to Acquire Nextgen
      • Other ownership developments
    • NBN - REGIONAL BACKBONE BLACKSPOTS PROGRAM (RBBP)
      • Background information
        • Table The Regional Backbone Blackspots Program - completed rollouts
    • NETWORK
      • National
        • Table Nextgen network distances and construction dates
      • International
    • PRODUCTS AND SERVICES
      • Introduction
      • High-speed internet
      • Transmission
      • Data centres
      • Customised data solutions
    • ACQUISITIONS AND ALLIANCES
      • Nextgen acquires Silk telecom (Silk)
      • Partnership with Sydney Teleport Services
    • COMPANY HISTORY
      • Brief timeline - 2000 - 2016
  • TPG TELECOM LIMITED
    • COMPANY INFORMATION
      • Overview
        • Table TPG Telecom Limited (TPG) at a glance - including key results
      • Company structure
    • COMPANY ANALYSIS
      • Competitive Analysis Profile
      • TPG's star continues to rise
      • TPG the Champion of Competition
      • TPG and the NBN
    • COMPANY ACQUISITIONS
      • Acquires AAPT
      • Acquisition of iiNet
    • COMPANY INVESTMENTS
      • Invests in Amcom
      • Invests in subsea cable
    • RECENT COMPANY DEVELOPMENTS
      • Bid to Become the Fourth Mobile Operator in Singapore
      • Dark Fibre and MVNO Agreement with Vodafone Australia
      • Spectrum Acquisition
      • Nationwide fibre capability for medical imaging specialist
      • FTTB Services To Go Live
    • NETWORK
      • Overview
      • PIPE Networks
    • FINANCIAL RESULTS
      • Year ending July 2016
        • Table TPG revenue and annual change - 2001 - 2016
        • Table TPG consumer - revenue breakdown by market segment (consumer) - 2010 - 2016
        • Table TPG - revenue ($ million) breakdown by division - 2009 - 2016
        • Table TPG - broadband ARPU - 2009 - 2016
      • Half year to January 2016
        • Table TPG - Revenue by Division - 2016
      • Year ending July 2015
      • Year ending July 2014
      • Year ending July 2013
      • Year ending July 2012
      • Year ending July 2011
    • OPERATIONAL STATISTICAL OVERVIEW
      • Table TPG - Consumer Broadband Subscribers (thousands) by Product - 2014 - 2016
      • Table iiNet - Broadband Subscribers (thousands) by Product - 2015 - 2016
      • Table TPG - Group Mobile Subscribers (thousands) by Division- 2014 - 2016
      • Table TPG Group - Total Subscribers, Mobile Subscribers - Jan 2016
      • Table TPG (only) - broadband subscribers on/off-net and bundled - 2008 - 2016
      • Table Historic - TPG on-net versus Soul off-net home phone subscribers, annual change - 2009 – 2015
      • Table Historic - TPG versus Soul mobile subscribers - 2008 - 2015
    • PRODUCTS AND SERVICES
      • Residential services
      • Business and wholesale services
      • International connectivity
      • National infrastructure developments
    • COMPANY HISTORY
      • Brief timeline - 1999 - 2016
  • VOCUS - M2
    • VOCUS
      • Financial Results - FY2016
        • Table Vocus key financial parameters - 2016
      • Operations Results - FY2016
      • Overview
      • Company analysis
      • Acquisitions / Mergers
      • Network
      • Recent Developments
      • Financial Results
        • Table Vocus - key financial parameters
      • Data Centres
      • Products and Services
    • M2 COMMUNICATIONS
      • Overview
        • Table M2 Telecommunications Group Limited (M2) at a glance
      • Financial results
        • Table M2 key financial parameters - 2015
        • Table M2 revenue makeup and annual change - 2004 - 2015
        • Table M2 key financial performance indicators - 2004 - 2015
        • Table M2 key financial parameters - 2013 - 2014
        • Table M2 revenue by segment- FY2014
        • Table M2 revenue by product - FY2014
        • Table M2 key financial parameters - 2012 - 2013
      • Services
        • Table M2 voice services performance indicators - 2013 - 2015
        • Table M2 mobile services performance indicators - 2013 - 2014
        • Table M2 internet services performance indicators - 2013 - 2014
        • Table M2 energy services performance indicators - 2013 - 2014
      • Products and services
      • Acquisitions
        • Table M2's acquisitions - 2005 - 2013
        • Table Primus Telecommunications Australia at a glance
        • Table Primus brief company history
    • AMCOM
      • Company Overview
        • Table Amcom Telecommunications Limited (Amcom) at a glance - historical
      • Financial results - historical
        • Table Amcom - operating revenue - 2000 - 2014
        • Table Amcom - key financial indicators - 2010 - 2014
        • Table Amcom - EPS - 2010 - 2014
        • Table Amcom revenue by service division - 2004 - 2013
        • Table Amcom revenue by service division - 2012 - 2014
      • Network
      • Acquisitions, alliances and subsidiary companies
        • Table Amcom's acquisitions - 2001 - 2014
        • Table Subsidiary companies
      • Products and services
      • Brief timeline 1988-2015

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