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Telco Company Profiles - 2nd Tier - Australia

Telco Company Profiles - 2nd Tier - Australia

Solid performances among operators auger well for the NBN age

Operators in this market reported steady revenue growth in fiscal 2014, reflecting an encouraging ongoing trend. The exception was AAPT, though this company has now been acquired by TPG and so a new era for the company may herald a change in its fortunes as it is able to utilise its assets in line with TPG’s wholesale services strategy. This acquisition showcased that in the market prepped for the NBN these players require size, geographic reach and a significant customer base among the lucrative government and business segments. This scale has enabled these 2nd tier players to weather aggressive competition from Telstra, which has itself firmed up its relationship with FOXTEL through a wholesale arrangement, enabling FOXTEL to provide broadband and voice services through Telstra’s infrastructure.

There are many transformations yet expected in the telecom sector in coming years as the market adjusts to the NBN. NBN Co, operating under a multi-technology platform rather than the FttP architecture originally envisaged, has shown a reinvigorated purpose in recent months which should see an escalation in the number of connected premises. Given these developments, many opportunities yet remain for the 2nd tier players, as TPG has shown with its commitment to fibre-enable up to half a million apartments within its existing footprint.

Amcom

Amcom provides a range of services bases on fibre and DSL infrastructure. It also offers training services to the consumer, corporate, wholesale, government and SME markets. The Western Australia-based company has solid prospects for future growth, and remains a well-managed and focused business. Amcom has constructed over 2,000km of high-speed fibre optic networks in Perth, Darwin, Alice Springs and Adelaide. It has seven data centres in its own right, while its network connects to 71 centres in the capital cities. The network provides access to around 80% of business premises in these cities. The company in mid-2014 announced plans to make acquisitions on the East Coast to further develop its Cisco-based platform. The company has shown consistent revenue growth in recent years, while its strategy for future growth appears promising.

AAPT

AAPT was acquired in 1999 by Telecom New Zealand as it made a $2 billion bid to break into the Australian market. The investment proved to be unsound for Telecom’s shareholders, and in recent years AATP’s financial performance has deteriorated. Its key retail division was sold to iiNet in 2010, while its remaining business and wholesale interests were sold TPG in early 2014. Though owned by TPG, AAPT remains a separate business and manages a substantial interstate network including 11,000km of fibre, its own data centres in major capital cities, fibre and Ethernet infrastructure. It is also a partner with NBN Co. The company has undergone significant management changes as it struggles to revitalise its financial position, which will help TPG better absorb the company’s assets and manage its strategic position in a fast-changing market.

iiNet

iiNet has developed into one of the largest DSL providers in Australia. The company delivers a wide range of telecom services including fixed-voice, mobile and broadband, business data housing and cloud-based services, VoIP and IPTV. The company manages a significant DSL and FttP network. During the last few years iiNet has expanded through a strategic program of acquisitions, which has consolidated its strengthening market position in the business broadband and mobile voice and data sectors. In March 2014 the founder of iiNet, Michael Malone, stepped down as both CEO and chairman of the company after more than twenty years at the helm. The company will enter a new phase of development with a new CEO. The company’s financials have been solid for a number of years, while growth at 7% for FY2014 enabled to company to broach $1 billion in revenue for the first time.

Macquarie Telecom

Established in 1992, Macquarie Telecom was one of the first telcos of the deregulated era. Its two key target markets are Australian mid-size corporates and the government sector. The Hosting business continues to be a key growth platform. With a third data centre operational in mid-2013, the company has bolstered its hosting and cloud-based services, which remain the main focus of its strategy for growth.

TPG Telecom

TPG Telecom provides a range of telecom services and also owns a cloud-hosting company and the PIPE network infrastructure. The company is delivering an extensive FttB service to apartment buildings in capital cities. In late 2014 these plans were approved by the AAAC, which determined that the FttB networks would not go against the level playing field provisions within the Telecommunications Act. TPG has also secured spectrum in the 2.5GHz band to bolster its wireless broadband capabilities, and has committed to investing in additional capacity with a subsea cable linking to New Zealand and the US West Coast. TPG’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.

Nextgen Networks

Nextgen specialises in data services for carriers, service providers, government and corporations. It owns and operates one of Australia’s largest national fibre networks, of over 19,000km of fibre rings, as well a data centres in all capital cities. 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.

FOXTEL

FOXTEL is the largest subscription TV (STV) provider in Australia, offering over 200 viewing channels. National coverage was secured in 2012 following the company’s acquisition of AUSTAR. Company ownership is equally divided between Telstra and News Corporation. More than 2.6 million homes had an STV service from FOXTEL in mid-2014, showing a 5.6% growth in subscriber numbers year-on-year. The company hopes to expand its services with a triple-play bundle of TV, broadband and telephony service during the first quarter of 2015, with the latter two services resulting from a wholesale agreement with Telstra.

M2 telecommunications

M2 has shown consistent growth since the mid-2000s, both through organic growth and strategic acquisitions. In 2009 it acquired People Telecom and the business assets of Commander Communications, both at bargain prices. In 2010 the company completed the acquisition of selected business assets of Clever Communications and Bell Networks, while in 2011 it purchased Clear Telecoms and later the subscribers and assets of AUSTAR Mobile from the pay TV satellite provider. In 2012 the assets of Primus Telecommunications were acquired adding further to its subscriber base. Further acquisitions in 2013 brought in Dodo and Eftel under the M2 umbrella. M2 has since declared that it may invest further in the energy sector, taking advantage of deregulated markets and the low customer acquisition cost advantages held by Dodo Energy.

Data in this report is the latest available at the time of preparation and may not be for the current year


  • EXECUTIVE SUMMARY
  • TELECOMS MARKET REVENUE OVERVIEW
    • TOTAL TELECOMMUNICATIONS SERVICES MARKET
      • Revenue, revenue growth and market share by major provider
        • Table Historic - Total telecoms revenues by major providers - 2000 - 2004
        • Table Total telecoms revenues by major providers - 2005 - 2013
        • Table Total telecoms service market share by major providers - 2003 - 2013
  • AAPT
    • COMPANY INFORMATION
      • Overview
        • Table AAPT at a glance
      • Company structure
      • Products and services
      • Customers
      • Competition
    • COMPANY ANALYSIS
    • NETWORK INFORMATION
      • Transmission infrastructure
    • NATIONAL BROADBAND NETWORK
      • Network certified
      • Wholesale services
      • Trial sites
      • Sale of spectrum to NBN Co
    • FINANCIAL RESULTS
      • Financial results 2014
        • Table AAPT revenues by service type - 2008 - 2013
        • Table AAPT revenue by service type (new style) - 2012 - 2014
        • Table AAPT EBITDA - 2011 - 2014
        • Table AAPT financial data H2 2014
        • Table AAPT operating expenses by type - 2008 - 2013
    • COMPANY HISTORY
      • Brief timeline - 1990 - 2014
  • AMCOM TELECOMMUNICATIONS LIMITED
    • COMPANY INFORMATION
      • Overview
        • Table Amcom Telecommunications Limited (Amcom) at a glance
    • COMPANY ANALYSIS
      • Well defined strategies
      • Independence from others
      • National broadband network (NBN)
    • FINANCIAL RESULTS
      • Year 2014
      • Year 2013
      • Year 2012
      • Year 2011
      • Financial statistics
        • 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
    • PRODUCTS AND SERVICES
      • Divisional overview
      • Amnet
      • Data Networks
    • NETWORK
      • Fibre network overview
      • SABRENet and maintenance agreement
    • ACQUISITIONS, ALLIANCES AND SUBSIDIARY COMPANIES
      • Acquisition overview
        • Table Amcom's acquisitions - 2001 - 2014
      • Amcom acquires IP Systems (IPS)
      • Amcom acquires L7 IT group
      • Partnership with BlueFire cloud services
      • AARNet collaboration
      • Subsidiary companies
        • Table Subsidiary companies
    • COMPANY HISTORY
      • Brief timeline - 1988 - 2014
  • FOXTEL
    • COMPANY INFORMATION
      • Overview
        • Table FOXTEL at a glance
    • COMPANY ANALYSIS
    • OPERATIONAL RESULTS
      • 2014
      • 2013
      • 2012
      • 2011
      • Subscriber statistics
        • Table Total FOXTEL and wholesale subscribers - 2012 - 2014
        • Table FOXTEL and wholesale subscribers by annual change - 2012 - 2014
        • Table Subscriber annual churn rate - 2002 - 2014
      • Historic subscriber statistics
        • Table Historic - FOXTEL and wholesale subscribers - 2002 - 2011
        • Table Historic - FOXTEL and wholesale subscribers by annual change - 2003 - 2011
        • Table Historic - FOXTEL subscribers by type - 2008 - 2011
    • FINANCIAL RESULTS
      • FY 2014
      • FY 2013
      • FY 2012
      • FY 2011
      • Statistical financial overview
        • Table FOXTEL financial indicators (US$) - 2012 - 2014
        • Table FOXTEL key financial indicators - 2012 - 2014
      • Historical statistical financial overview
        • Table Historical - FOXTEL monthly ARPU - 2003 - 2014
    • ACQUISITIONS, ALLIANCES AND SUBSIDIARY COMPANIES
      • Acquisition of AUSTAR
        • Table AUSTAR key operating and financial figures - 2009 - 2012
        • Table AUSTAR brief company history - 1994 - 2012
      • Acquisition of Premium Movie Partnership (Showtime)
    • PRODUCTS AND SERVICES
      • Digital pay TV
      • Apps availability and the move to IPTV
        • Table FOXTEL on-demand pricing - 2011 - 2014
      • FOXTEL further expanding IPTV availability
      • Presto
      • Optus resells 1Q HD
      • Triple-play services
      • Satellite services
      • Operating centres in Sydney and Melbourne
    • COMPANY HISTORY
      • Brief timeline - 1994 - 2014
  • IINET
    • COMPANY INFORMATION
      • Overview
        • Table iiNet Limited (iiNet) at a glance
      • Current issues
      • Change of leadership
    • FINANCIAL RESULTS
      • Year 2014
      • Year 2013
      • Year 2012
        • Table iiNet total revenue - 2004 - 2014
        • Table iiNet key financial statistics - 2007 - 2014
        • Table iiNet ARPU by service - 2008 - 2014
      • Year 2011
        • Table iiNet total revenue (historic) - 1997 - 2003
    • OPERATING RESULTS
      • Subscriber statistics
        • Table Historic - iiNet active subscribers - 1997 - 2004
        • Table iiNet active subscribers - 2005 - 2014
        • 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
    • 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
    • PRODUCTS AND SERVICES
      • Home and SOHO
      • Business
        • Table iiNet business revenue - 2009 - 2014
      • Reselling agreements
    • COMPANY HISTORY
      • Brief timeline - 1993 - 2014
  • MACQUARIE TELECOM
    • COMPANY INFORMATION
      • Overview
        • Table Macquarie Telecom (Macquarie) at a glance
    • FINANCIAL RESULTS
      • FY 2014
      • FY 2013
      • FY 2012
      • FY 2011
      • Operating revenues and statistical overview
        • Table Macquarie key financial indicators - 2008 - 2014
        • Table Macquarie EPS results - 2008 - 2014
        • Table Macquarie revenue by division - 2004 - 2014
        • Table Macquarie - annual change in revenue by division - 2005 - 2014
        • Table 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
    • SERVICES
      • Hosting solutions
      • Telco
        • Table Macquarie - Telco division revenue - 2011 - 2014
      • Management tools
      • Data centres
      • Macquarie Telecom Enterprise Cloud
    • COMPANY HISTORY
      • Brief timeline - 1992 - 2014
  • M2 TELECOMMUNICATIONS
    • COMPANY INFORMATION
      • Overview
        • Table M2 Telecommunications Group Limited (M2) at a glance
    • COMPANY ANALYSIS
      • Growing the company
      • Arriving in the top ten
      • Planned restructure
    • FINANCIAL RESULTS
      • FY2014
        • Table M2 key financial parameters - 2013 - 2014
        • Table M2 revenue by segment- FY2014
        • Table M2 revenue by product - FY2014
      • FY2013
        • Table M2 key financial parameters - 2012 - 2013
      • FY2012
      • FY2011
      • Financial statistics overview
        • Table M2 revenue makeup and annual change - 2004 - 2014
        • Table M2 key financial performance indicators - 2004 - 2014
    • SERVICES
      • Fixed-line voice
        • Table M2 voice services performance indicators - 2013 - 2014
      • Mobile
        • Table M2 mobile services performance indicators - 2013 - 2014
      • Internet
        • Table M2 internet services performance indicators - 2013 - 2014
      • Energy
        • Table M2 energy services performance indicators - 2013 - 2014
      • Brands
    • PRODUCTS AND SERVICES
      • Overview
      • M2 Consumer and Business (retail)
      • M2 Wholesale
      • NBN
    • ACQUISITIONS, ALLIANCES AND SUBSIDIARY COMPANIES
      • Acquisition overview
        • Table M2's acquisitions - 2005 - 2013
      • Acquisition Dodo - 2013
      • Acquisition Eftel - 2013
      • Acquisition Primus Telecommunications - 2012
        • Table Primus Telecommunications Australia at a glance
        • Table Primus brief company history
      • Acquisition Time Group - 2012
      • Acquisition of Flextalk - 2012
      • Acquisition of AUSTAR Mobile - 2011
      • Acquisition of Clear Telecoms (M2 Clear) - 2011
      • Acquisition of Bell Networks - 2010
      • Acquisition of Clever Communications - 2010
      • Acquisition of People telecom - 2009
      • Acquisition of Commander assets - 2009
      • Acquisition of Unitel Australia - 2008
      • Acquisition of Orion Telecom - 2007
      • Acquisition of Tenex Communications - 2007
      • Acquisition of Wholesale Communications - 2007
    • COMPANY HISTORY
      • Brief timeline - 1999 - 2014
  • NEXTGEN NETWORKS PTY LIMITED
    • COMPANY INFORMATION
      • Overview
        • Table Nextgen Networks Pty Limited (Nextgen Group Holdings) at a glance
      • Background information on company ownership
      • Recent ownership developments
    • NBN - REGIONAL BACKBONE BLACKSPOTS PROGRAM (RBBP)
      • Background information
        • Table The Regional Backbone Blackspots Program - completed rollouts
    • NETWORK
      • Overview
        • 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)
    • COMPANY HISTORY
      • Brief timeline - 2000 - 2014
  • TPG TELECOM
    • COMPANY INFORMATION
      • Overview
        • Table TPG Telecom Limited (TPG) at a glance - including key results
    • COMPANY ANALYSIS
    • LATEST DEVELOPMENTS
      • TPG offers low cost mobile broadband
      • TPG moves with TrustedCloud
      • Acquires AAPT
      • Secures mobile spectrum
      • Invests in subsea cable
      • TPG and the NBN
    • COMPANY DIVISIONAL OVERVIEW
      • Company structure
    • NETWORK
      • Overview
      • PIPE Networks
    • FINANCIAL RESULTS
      • Year ending July 2014
      • Year ending July 2013
      • Year ending July 2012
      • Year ending July 2011
      • Financial statistical overview
        • Table TPG revenue and annual change - 2001 - 2014
        • Table TPG - key financial indicators - 2007 - 2014
        • Table TPG - opex versus capex - 2007 - 2014
        • Table TPG - revenue breakdown by market segment (consumer) - 2010 - 2014
        • Table TPG - revenue breakdown by division - 2009 - 2014
        • Table TPG - broadband ARPU - 2009 - 2014
      • Operational statistical overview
        • Table TPG - broadband subscribers on/off-net and bundled - 2008 - 2014
        • Table TPG on-net versus Soul off-net home phone subscribers, annual change - 2009 - 2014
        • Table Historic - TPG versus Soul mobile subscribers - 2008 - 2014
    • PRODUCTS AND SERVICES
      • Residential services
      • Business and wholesale services
    • COMPANY HISTORY
      • Brief timeline - 1999 - 2014
  • WHOLESALE AGGREGATORS
    • Table The wholesale market in Australia - key players - 2014

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