Thursday, 04 July 2019 05:16

Vocus Group to operate as three independent business units

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Vocus Group to operate as three independent business units Pixabay

Australia's fourth largest telecommunications company, the Vocus Group, has announced that it will be simplifying its business into three independent business units.

In a statement to the Australian Stock Exchange on its so-called Strategy Day on Wednesday, Group managing director and chief executive Kevin Russell said these would be Vocus Network Services, Vocus Retail and Vocus New Zealand.

Vocus recently attracted two takeover bids and then saw them disappear. The Swedish private equity firm EQT and local energy giant AGL expressed interest in buying the company and then decided not to go ahead.

Russell reaffirmed the company's guidance for the financial year 2019, saying the underlying EBITDA would be between $350 million and $370 million.

He said the underlying EBITDA for the financial year 2020 would be in the same range, with growth of $20 million to $30 million in Vocus Network Services business offset by a similar decline in Vocus Retail.

Vocus has been hit by the ever-decreasing margins of its broadband business as the NBN Co has made it difficult for RSPs to turn a profit. Its retail business was written down by about $1 billion in 2017.

In the past 24 months, Vocus has lost 84,000 NBN broadband customers to its rivals.

“Today is a welcome opportunity to tell our story. We have established a clear plan and put in place an outstanding team to execute on it,” said Russell.

“We are simplifying Vocus into three independent business units, each of which has different opportunities. We are clear that our core business, Vocus Network Services, has untapped growth potential and an outstanding market opportunity.

"Vocus Retail is a business in turnaround, facing headwinds due to legacy voice products and the transition of customers to lower margin NBN products. Vocus New Zealand continues to be a very strong performer and is well positioned for future growth."

Russell said during FY19, brand refreshes had been carried out across its Dodo and Commander brands, including Commander Centre channel reinvigoration and opening of new centres.

The MVNO agreement had been renegotiated with Optus, to drive better mobile offers and have a pathway to 5G and fixed wireless broadband.

He said product simplification and implementation of a digital operating model has also been implemented.

And in FY20, Russell said Vocus would roll out new ranges of broadband-led bundled products, and attaching energy and mobile.

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Sam Varghese

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Sam Varghese has been writing for iTWire since 2006, a year after the site came into existence. For nearly a decade thereafter, he wrote mostly about free and open source software, based on his own use of this genre of software. Since May 2016, he has been writing across many areas of technology. He has been a journalist for nearly 40 years in India (Indian Express and Deccan Herald), the UAE (Khaleej Times) and Australia (Daily Commercial News (now defunct) and The Age). His personal blog is titled Irregular Expression.

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