Tuesday, 22 October 2013 07:26

Will TPG buy AAPT?

By

Telecom New Zealand has refused to deny increasing speculation that it is readying AAPT for sale. The logical purchaser is the ambitious TPG Group.

No-one has confirmed or denied anything, but the dots are starting to join up. Telecom New Zealand is seeking buyers for its Australian AAPT subsidiary. Anonymous sources have been quoted by various media outlets confirming the plans, which would see a sale by Christmas.

It is no surprise. Telecom NZ has been trying to offload AAPT almost since it acquired it for $2 billion in 1999 – just before the market crashed. It has never fulfilled the hopes Telecom NZ had for it, and has had a tougher and tougher time of it as Telstra has rebounded and newer players like TPG and iiNet have surged.

But AAPT remains a valuable property. It has 11,000 km of fibre around Australia, with links between all major capitals and into 1500 premises. It has data centres around the country and it has a large services business, with 5000 business and 300 wholesale customers. But it also has an unprofitable voice business.

Telecom NZ sold AAPT’s retail business to iiNet in 2010 for $60 million, at the same time selling its own 19% stake in iiNet. But iiNet has not been mentioned as a possible purchaser of the rest of AAPT – the name being most widely mentioned is TPG.

TPG is on a roll. It recently announced record revenues and profits, and is approaching a billion dollars in annual revenues. It acquired spectrum in the recent digital dividend auction – the only other company besides Telstra and Optus to do so – and it has announced its own NBN-like fibre network to metropolitan apartment buildings.

AAPT’s fibre links would be a good fit for TPG, giving it substantial extra broadband and backhaul capacity. TPG’s David Teoh plays his cards very close to his chest, and has given no indication of any interest in AAPT, but many analysts have pinned his company as a likely buyer – because of the fit, and because TPG could afford it.

It is unlikely Telecom NZ would get more than $400 million for AAPT, after holding out for much more in recent years. The company announced uninspiring financial results in September and wanst to concentrate on its local business. In March of this year it cut back the Australian operations of its Gen-I IT division. Over 100 staff lost their jobs, with Gen-i Australia now concentrating on supporting large corporate customers with specific trans-Tasman IT services requirements. 


BACK TO HOME PAGE

NEW OFFER - ITWIRE LAUNCHES PROMOTIONAL NEWS & CONTENT

Recently iTWire remodelled and relaunched how we approach "Sponsored Content" and this is now referred to as "Promotional News and Content”.

This repositioning of our promotional stories has come about due to customer focus groups and their feedback from PR firms, bloggers and advertising firms.

Your Promotional story will be prominently displayed on the Home Page.

We will also provide you with a second post that will be displayed on every page on the right hand side for at least 6 weeks and also it will appear for 4 weeks in the newsletter every day that goes to 75,000 readers twice daily.

POST YOUR NEWS ON ITWIRE NOW!

talentCRU FREE WEBINAR INVITE - Cybersecurity in COVID-19 times and beyond

With the mass transition to remote working, our businesses are becoming highly dependent on the Internet.

So, it’s no surprise that we’ve seen an increase in cyberattacks.

However, what’s more concerning is that just 51% of technology professionals are highly confident that their cybersecurity teams are able to detect and respond to these threats.

Join us for this free online roundtable where our experts discuss key cybersecurity issues IT leaders are facing during the pandemic, and the challenges that will likely emerge in the coming years.

JOIN WEBINAR!

BACK TO HOME PAGE
Graeme Philipson

Graeme Philipson is senior associate editor at iTWire. He is one of Australia’s longest serving and most experienced IT journalists. He is author of the only definitive history of the Australian IT industry, ‘A Vision Splendid: The History of Australian Computing.’

He has been in the high tech industry for more than 30 years, most of that time as a market researcher, analyst and journalist. He was founding editor of MIS magazine, and is a former editor of Computerworld Australia. He was a research director for Gartner Asia Pacific and research manager for the Yankee Group Australia. He was a long time weekly IT columnist in The Age and The Sydney Morning Herald, and is a recipient of the Kester Award for lifetime achievement in IT journalism.

BACK TO HOME PAGE

VENDOR NEWS & WEBINARS

REVIEWS

Recent Comments