TPG Needs the Merger with VHA, and to Grow Business Customers

S. Soh

Summary Bullets:

• TPG is facing headwinds in growing its revenue and there is limited room to expand its margins. It needs to find new ways to grow its business.

• The merger with VHA will give TPG mobile capabilities and greater scale to compete with Telstra and Optus; but it also needs to pursue growth from the business segment.

TPG released its H1 FY2019 results in late March 2019. Total revenue for H1 FY2019 (ended 31 December 2019) declined 1.5% YoY to A$1.24 billion, but underlying EBITDA and NPAT improved 2.8% and 3.5% respectively. Revenue and EBITDA growth was mainly due to improvement in its Corporate division, but the growth was offset by the decline of Consumer division due to the DSL to NBN migration and iiNet home phone decline. Within Corporate, growth was mainly driven by the Vodafone Hutchison Australia (VHA) fibre contract (contributed A$22 million of growth), which will not deliver long-term growth. While TPG has not been able to grow its revenue in H1 FY2019 compared to the same period in the previous financial year, it has been successful in reducing costs to improve its margins including a reduction in employment and overhead costs. With the consumer market challenged by competition and NBN migration, there is limited upside. There is also limited room for further cost reduction, so business-as-usual is not an option for TPG. Continue reading “TPG Needs the Merger with VHA, and to Grow Business Customers”

Optus and Cisco Join Forces to Target SMBs in Australia

S. Soh

Summary Bullets:

• Optus has partnered with Cisco to launch two new offerings at Cisco Live 2019 – Optus Cloud Calling (BroadCloud) and Managed Cloud networking (Meraki).

• The combination of NBN, LTE, SD-WAN, and cloud UC will meet the needs of many SMBs and branch office scenarios.

Optus and Cisco continue to strengthen their relationship. At the Cisco Live 2019 event in Melbourne, Australia, Optus was the key sponsor and it used the event to announce new Cisco-based solutions. The first solution is Optus Cloud Calling which is a unified communications (UC) service based on Cisco’s (formerly Broadsoft) BroadCloud platform. This is cloud-based UC solution hosted by Cisco. The service offers telephony, native mobility, and advanced conferencing and collaboration tools. BroadCloud is integrated with Webex solutions to assess audio/video conferencing and team collaboration applications. Optus Business is providing this service as a managed service bundled with its Evolved Voice SIP trunking and business mobile services. Continue reading “Optus and Cisco Join Forces to Target SMBs in Australia”

Vocus Looks Like a New Company Starting Out on a Three-Year Turnaround Journey

S. Soh

Summary Bullets:

  • Vocus’ results for the first half of the financial year do not look great. Revenue is stagnating and EBITDA is declining.
  • There is, however, some optimism as the company embarks on its three-year turnaround journey. The company has a new leadership team and its network assets remain a key differentiator.

Vocus has reported its results for the first half of the financial year (H1 FY 2019) and updated investors on the outlook for the company. Revenue for H1 FY 2019 was flat (growth of barely 1% YoY) and underlying EBITDA dropped 10% compared to H1 FY 2018. Consequently, underlying NPAT declined 29% and net leverage ratio increased to 3.1x. Net debt increased $88 million to $1,089 million. The company grew revenue from its New Zealand operations, its enterprise, government and wholesale (the bulk of the growth is from the project revenue associated with the construction of the Coral Sea cable system). However, the growth was offset by the decline in its retail business in Australia; consumer declined 12% and SMB declined 27%. Overall, the financial results are not looking too good for the first half of the financial year. Continue reading “Vocus Looks Like a New Company Starting Out on a Three-Year Turnaround Journey”

Alibaba Cloud Looks for Growth Outside of China, and Indonesia Is a Good Target

S. Soh

Summary Bullets:

  • Alibaba Cloud is gaining a stronger foothold in Indonesia with its second data centre, a growing partnership ecosystem and an initiative to support start-ups to develop their business through a cloud-native approach.
  • Alibaba needs to grow its international presence, and it is establishing an early presence in markets such as Indonesia where competitors do not yet have a local presence.

Alibaba Cloud has launched a second data centre in Indonesia after launching the first data centre 10 months earlier. The second data centre enables Alibaba Cloud to increase capacity, provide higher availability and improve disaster recovery capabilities. The company also launched the Internet Champion Global Accelerator Program to support the growth of start-ups and local talents. The program will provide training, mentorship and venture capital opportunities to enterprises and professional services. The program is launching in Jakarta, and it will be extended to Bali in January 2019, as well as other global markets in the future. This is a strategic move since start-ups and SMEs in general are more ready to adopt a cloud-native approach and can become heavy cloud users as they scale up. Continue reading “Alibaba Cloud Looks for Growth Outside of China, and Indonesia Is a Good Target”

The Road Ahead for Australian Start-up MOVUS for AI and Predictive Maintenance

S. Soh

Summary Bullets:

• Reactive, Preventive, and Predictive Maintenance regimes will continue to be major use cases for AI-assisted industrial IoT deployments

• As a start-up, MOVUS has a strong first mover local advantage, channels, an end-to-end platform and OT approach which are unique.

Artificial intelligence (AI) – the science of making computers mimic humans using logic, decision trees, deep learning, and machine learning – is fast approaching the market opportunity around preventive and predictive maintenance. According to a recent GlobalData survey, the top two business challenges in Australia are in improving operational efficiency and reducing costs. Many businesses, such as manufacturers, producers of natural resources, through to the agriculture and health sectors, need ongoing reliability of machines and their constituent parts to keep the lights on in the business. Unplanned outages, for example, can cost an oil and gas company, on average $50 million dollars annually. In the case of a windfarm, in the event of one single fail, an entire turbine needs to come down, a technical crew with a crane needs to be on site costing $100,000 or more for each time a part fails. There are many cases of overheated servers in data centers that caused major outages. The myriad of examples create compelling business cases. Continue reading “The Road Ahead for Australian Start-up MOVUS for AI and Predictive Maintenance”

Telstra Vantage 2017: Programmable Network Inches Ahead of Competitors in the Software-Defined Space

S. Soh

Summary Bullets:

  • Enterprises need a more agile network solution to support rapidly changing IT requirements and the migration of workloads to the cloud.
  • Telstra’s Programmable Network is designed to overcome challenges enterprises are facing, and the platform is developed and enhanced in-house through an agile and iterative approach.

Telstra Programmable Network (TPN) is an elegant platform designed to solve some issues enterprises are facing. In the digital era, enterprises need to move fast to transform their business and stay competitive. Increasingly, companies are gathering and analysing data to develop competitive advantages. IT needs to ensure that their network solutions are flexible to support digital platforms and hybrid cloud services. Speed (fast provisioning), agility (scale up and down) and cost-effectiveness are important with end users demanding more and the budget not increasing proportionately. In addition, with more applications and services running over the network, there needs to be tools to enable ease of management and visibility. Continue reading “Telstra Vantage 2017: Programmable Network Inches Ahead of Competitors in the Software-Defined Space”

Telstra Liberates the Workforce with Fixed-Mobile Convergence

S. Soh

Summary Bullets:

• The workplace is going through transformation, leveraging technology to enable workers to be more mobile and collaborative.

• Telstra’s FMC solution helps to overcome several challenges in integrating UC&C and mobility solutions which overcomes some pain points faced by enterprises.

Telstra launched its Liberate fixed-mobile convergence (FMC) solution at Vantage 2017 with the aim to free workers from their desks. This launch is timely because workplace transformation is underway and enterprises want to achieve workforce mobility. This benefits individuals who want greater work-life balance, and for an organization, it means productivity and competitiveness. Many Australian organizations see this as a strategic move that will motivate staff, enhance collaboration and reduce overheads.

Continue reading “Telstra Liberates the Workforce with Fixed-Mobile Convergence”