Question 1

Why is Vocus shifting its focus away from the consumer market?

Accepted Answer

Intense margin compression driven by the NBN has made the consumer and SMB sectors low-margin environments. Vocus is pivoting to leverage its 25,000km fibre network and subsea assets to secure higher-margin revenue, aiming to maintain its FY19 underlying EBITDA guidance of $350-$370m.

Question 2

What are the specific growth targets for the enterprise and government sectors?

Accepted Answer

Vocus currently holds a 4.5% share in the Enterprise market and 11.5% in Government. The company intends to grow these figures by increasing infrastructure utilization and capturing emerging 5G backhaul opportunities through its Network Services division.

Question 3

How does the New Zealand business fit into the broader group strategy?

Accepted Answer

Vocus NZ is the group’s top-performing unit, currently holding a 13% share of the consumer broadband market. Management plans to accelerate this momentum by tripling its mobile customer base over the next three years via its MVNO platform.

Question 4

What is the plan for stabilizing the retail business unit?

Accepted Answer

To offset NBN-related losses, the retail unit will focus on bundling mobile and energy services to increase customer stickiness. This strategy is essential for the company to meet its $350-$370m EBITDA target following four unsuccessful acquisition bids in the last two years.

Vocus Strategy update: leverage fibre, subsea and mobile to build Enterprise, Government & Wholesale market share

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