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 | 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










Twitter and LinkedIn »



Follow us to receive Twitter updates when new discussions are posted in our forums:



Follow us to receive Twitter updates when news items and blogs are posted in our frontpage:



Follow us to receive Twitter updates when tech item prices are listed in our price comparison site:



Trending now »

Hot discussions in our forums right now:

Chorus to offer 10Gbit plans for all????
Created by KrazyKid, last reply by MichaelNZ on 12-Nov-2019 15:39 (43 replies)
Pages... 2 3


Mac use enables greater productivity, employee satisfaction at IBM
Created by FineWine, last reply by Geektastic on 13-Nov-2019 23:34 (13 replies)

Beach house Fuse Box - and secondary fuse box in garage - MAN links.
Created by WanaGo, last reply by snnet on 13-Nov-2019 21:45 (13 replies)

What "SATA expansion" PCIe card to use for Unraid?
Created by chevrolux, last reply by richms on 13-Nov-2019 19:09 (12 replies)

Big Pipe Vs Skinny
Created by johny99, last reply by nztim on 13-Nov-2019 15:43 (24 replies)
Pages... 2


Cheap drone (Sub $200)
Created by xpd, last reply by richms on 13-Nov-2019 14:29 (12 replies)

Blood pressure monitor - battery
Created by PSLog, last reply by eracode on 10-Nov-2019 17:38 (12 replies)

Thumping noise at the fibre box
Created by GSManiac, last reply by gaddman on 12-Nov-2019 12:13 (22 replies)
Pages... 2