Geekzone: technology news, blogs, forums
Guest
Welcome Guest.
You haven't logged in yet. If you don't have an account you can register now.
Vocus New Zealand on the block as Aussies bail
Posted on 23-Oct-2017 17:06 by Bill Bennett | Tags Filed under: Articles



Vocus is preparing its New Zealand assets, which include mobile, broadband, and energy offerings, for sale by June 2018, while also exploring the sale of its ‘non-core Australian assets’ including datacentres.

Source: Vocus to sell New Zealand assets | ZDNet

The Australian parent is in trouble. As is so often the case, the people at the top decides to get rid of the New Zealand operation. After years of telling us otherwise, Vocus New Zealand is suddenly “non-core”.

Vocus New Zealand has been performing well. If anything it has done better than the Australian business.

The company’s annual report to shareholders shows the facts:

  • New Zealand revenue up 123 percent.
  • The consumer business is up 186 percent.
  • EBITDA up 103 percent in NZ dollars.
  • Average broadband revenue per customer is $71.
  • In the most recent quarter Vocus NZ had an 18 percent share of new UFB connections. That’s punching way above its weight.

Where are the buyers?

The problem for the Australian parent is there is not a conga-line of potential buyers waiting to snap up New Zealand telecommunications assets. That is, as always, except at fire sale prices.

It’s possible parts of Vocus might find willing buyers. Taken as a whole it is most likely too big for a single NZ telecommunications industry player to swallow whole. We’ve seen  the problem Vodafone had absorbing Telstra-Clear. 2degrees did a fine job integrating Snap. But that deal was at least an order of magnitude smaller.

Vocus is New Zealand’s fourth largest retail telco. It comes in behind Spark, Vodafone and 2degrees.

If the stories about a pending IPO are correct, you can rule out Vodafone as a buyer. Spark and 2degrees are also unlikely buyers, for different reasons. Although all three might like to rip juicy morsels from the carcass.

There may be regulatory reasons why none of the three bigger retail telcos would want Vocus.

Vocus New Zealand options

Which leaves three plausible options. The first is that the parent company has a big overseas buyer in mind. At times like these China often gets mentioned. Maybe that’s a possibility. We know Chinese telecommunications executives have been window shopping in New Zealand in recent years.

A second option is for a private equity buyer to pick up the business. It can’t be ruled out, but Vocus New Zealand was already in the process of applying something similar to the kind of rationalisation private equity firms apply.

The other possibility is some form of management buyout. Of course, these three alternatives are not mutually exclusive. And there is some smart telco investment money in the country. At least some of that will be from those who cashed out during the last five years of industry consolidation.

One thing is likely, the parent company might struggle to get back all it has invested in Vocus New Zealand.

The New Zealand telco sector has barely stopped to catch its breath since the government stepped-in with its nationwide ultrafast fibre programme started. That triggered a wave of merger and acquisition activity which is not over yet. It’s likely to be a busy year for the industry.

Vocus New Zealand on the block as Aussies bail was first posted at billbennett.co.nz.

Vocus New Zealand on the block as Aussies bail







comments powered by Disqus


Trending now »

Hot discussions in our forums right now:

Kiwis to be hit with tax on online purchases
Created by Gordy7, last reply by JimmyH on 19-Nov-2017 22:03 (170 replies)
Pages... 10 11 12


Spark fibre conflict with ethernet switch.
Created by sam395, last reply by Lias on 16-Nov-2017 14:49 (18 replies)
Pages... 2


Skinny just increased rollover 4g data to 10gb on the $46 mobile plan
Created by surfisup1000, last reply by michaelmurfy on 19-Nov-2017 23:29 (12 replies)

Curious updates from Bigpipe
Created by robjg63, last reply by hio77 on 17-Nov-2017 19:27 (11 replies)

HDMI over Ethernet
Created by Rickles, last reply by richms on 19-Nov-2017 21:00 (9 replies)

Potential heatpump issue
Created by theitman, last reply by Rickles on 19-Nov-2017 18:41 (9 replies)

Data hunt (free data game) is back!
Created by PhantomNVD, last reply by PhantomNVD on 19-Nov-2017 13:51 (67 replies)
Pages... 3 4 5


Replacing HDD on a Laptop
Created by MarkH67, last reply by Batman on 19-Nov-2017 13:43 (17 replies)
Pages... 2