Summary Bullets:

• Aussie Broadband has set itself a very ambitious growth target in a market that continues to be hypercompetitive and has further consolidation ahead.
• Changes in technological advancements, the rise of cloud, and commoditization of connectivity has contributed to Australian enterprise segment consolidation over recent years.

Australia’s Aussie Broadband has unveiled its ‘Look to 28’ strategy at its investor day, outlining its bold vision for the company’s growth and diversification over the next three years. Aussie’s strategy is focused on improving its operational efficiency, growth, strategic investments, and disciplined capital management. It is underpinned by a six-pillar technology plan, emphasizing security, transformation, and innovation. The company has set an ambitious growth target, which will see it strive to see revenue growth of 35% through 2028 to AUD1.6 billion ($1 billion). While this announcement from Aussie Broadband is ambitious, the company should be ready to expect to experience some headwinds as the Australian telecommunications market continues to be competitive and with further consolidation on the horizon in the business, enterprise, and government segments in the near-term.

Aussie Broadband continues to evolve from a niche NBN provider to now a formidable player in the Australian telecommunications landscape. Aussie Broadband’s financial trajectory has been impressive, with the company experiencing strong CAGR of 51% over the last four years, predominately due to its strong growth within its residential segment and with its recent acquisitions of Over the Wire and Symbio, which have added additional capabilities to the company. A key aspect of Aussie Broadband’s strategic ambition is to change its revenue mix, reducing its reliance on the residential segment and to grow other areas of the business. The company will look to increase its market share in the business, enterprise, and government segments, where the company will combine these markets into one segment as it looks to increase efficiencies across its delivery, operations and customer management teams while simplifying its product portfolio with sector crossover. The carrier will also look to target all industry verticals across small businesses, while in the enterprise market focus on the retail, financial services, construction, and healthcare verticals in addition to local and government agencies.

The Australian telecommunications landscape, particularly in the business and enterprise segment, has changed over recent years and continues to evolve, with changes in technological advancements, the rise of cloud services, and commoditization of connectivity all contributing to the market consolidating to become a more service-centric ecosystem. Aussie Broadband has outlined that it will look to target potential new customers with its core connectivity product while targeting customers in its 792 on-net fiber buildings and 2,434 near-net locations. As the Australian business and enterprise telco market continues to consolidate with Vocus acquiring TPG’s fixed and fiber networks assets along with its business, enterprise, and government customer base. In the short term, Aussie Broadband could attempt to grow its share at the expense of TPG targeting the carrier’s customer base, and leveraging the uncertainty of the imminent merger, though the carrier will more than likely try to capture more of the incumbents’ price-sensitive customers while focusing on its strong customer service and automation-led service delivery. However, for Aussie to be successful in its strategy, it must focus beyond its core voice and fiber products and strengthen its services capabilities to meet the growing demands from its enterprise customers.