Strategic Foresight - Insights in Business and Technology

First, what I wrote about ABB's FY23 Results last year.     Update on ABB's Business  ABB's Acquisition Spree - Ongoing Tussle and Drivers Behind it.  My other post on NBN and its Economics

Australia Telecom Industry in Transition - From Four Pillar to Six Pillar Model  Australia Telecom Industry - Fixed Services  Australia Telecom Industry - Fixed Internet Ranking   Australia Telecom Industry - Mobile Services  Australia Telecom Industry - Mobile Internet Ranking   My previous post on the Global Telecom Industry Evolution to date.

 Aussie Broadband's  (ABB) FY23 Results and Why it's Emerging as an Acquisition Target NBN Consumer 2019, 100K customers, unprofitable.  2023, 700K customers, NPAT of $37Mn. 65% of Revenue from the consumer segment. 12% of NBN customers are on >  $100/month plan and 40% of Aussie customers are in this segment. Aussie acquires more than half of all new high value subscribers to the NBN. Business & Govt Business segment grew by 8% to $90Mn Rev. EE is adding to margin growth >800 new deals – SMB is driving it  Both segments utilise wholly owned fibre and an internally built cloud platform to generate 50% GM against residential GM of 30%. As those segments grow, profits will disproportionately rise. Smallest telco to build its own fibre backhaul. Built in house software to manage data loads, billing and other core functions. Wholesale business offers white labelled telco services to 3rd parties like Origin, was its fastest growing segment and a genuine surprise. Revenue r

 India and China's - Game of Thrones via Economic and Political Lens Indias Conundrum India is playing its part in the BRICS because of the following India's trust in China has eroded due to 4 skirmishes at the Northern Border. India is wary of China's growing clout in the new world order. While BRICS is economically China-centric, it is ensuring that it doesn't become a Unipolar bloc in Asia and another India-bashing group like OIC used to be. India can no longer rely on Russia as it has been forced to become China's ally because of sanctions. By consenting to an expansion, it is mounting pressure on China and other relevant parties to acknowledge its deserving position in the UN's Permanent Five + Group and refrain from raising objections. Besides India's trade deficit with the New BRICS being around 69%, prompting a need for effective management. In response, India is seeking to promote the use of local currency in trade transactions, thereby reducing its

TPG Heading for a Challenging Future  HY23 Results - Key Takeaways - The merger with Vodafone was a necessary remedy to the NBN, but it hasn’t lived up to expectations. TPG’s plan for the Vodafone merger was to do what it has always done – cram lots of users through a fixed asset base to raise profits. It hasn’t worked out that way. Selling off the wholesale Fibre Business can be likened to relinquishing a fortress, where the installation of the fibre requires minimal capital and new customers translate to higher margins and earnings, with the capacity for expansion being remarkable. This decision can be interpreted as a demonstration of TPG's weakness, rather than one that emanates from a position of strength. The business cannot sustain an expensive multi-brand strategy as it shifts towards a pure RSP play. Hence abandoning it. The emerging trend of choosing Prepaid mobile over post-paid is reemphasised (MVNO Play). Post-paid ARPU increase primarily from price rise in Jan and Feb

Brand value and positioning changes in Australia.  Optus suffered from a data security incident in 2022, while Retailers dominate the top 10 and Auspost ranks surprisingly low.  The value of a brand can be calculated from a company's balance sheet and has a significant impact on its financial success. Here are the brand equities of the top telecom players worldwide.   My post on the future of global Telecom and IT players gives good insight. Source: Roy Morgan Comms Day

Australian Economic Outlook FY2024  The Australian Economy is Strong and Stable.  GDP is to grow by 1.4% and will accelerate in 2025.  Interest Rates will head southwards in Q2. Commodity, Minerals, Tourism and Education driving the growth.

  NBN Co FY 23 Results - Key Takeaways  -- NBN Co’s Revenue has increased by 4% in FY23 and is facing headwinds for increasing the revenue.  CAGR stands at 8.7%. WACC - 3.18% (heading upwards) Has the highest EBITDA margin (68.2%) among telcos globally. Consumer uptake is at a snail's pace with only 40K net additions in the last 12 months.  12.3 Mn customers ready to connect  8.56 Mn are active (30% idle network) 6.64 Mn (78.2%) users are on <= 50 Mbps 2 Mn (24.2%) users < 50 Mbps, 4.52 Mn users on 50 Mbps 1.83 Mn (20.7%) users are on >= 100 Mbps (risen by 2%) 6.6 Mn premises ready for Ultrafast (incl 2.5 Mn on HFC) Poor uptake – only 50-60K has upgraded In all 1.83 Mn users are using Ultrafast (>=100 Mbps) internet. Facing heat from Starlink and 5G providers in remote areas Starlink In Australia > 120K subscribers Sky Muster has declined from 108K to 96.1K In the Enterprise 35K EE SIOs are active.  It seeks to improve its top and bottom line by implementing price i

Australia is Lagging in Internet Speed While Price is Going Up.  There are valuable takeaways from New Zealand's fibre optic infrastructure rollout, which boasts faster spee ds and more affordable pricing. Why Australia's Internet services are so expensive compared to other countries. A quick Big Mac Index test reveals why What the Industry Experts Paul Budde, John de Ridder and Bob James are saying  about why Australia is Lagging.  Source: Comms day The NBN Pricing Construct by Tony Eyers is a worthy read to view the four-tiered structure.   AVC - Connection Cost  CVC - Bandwidth or Capacity Cost POI - Connection Cost  POI - One-Off Set-up Fee      Snippet from the note below.  Source: TekTel 

Mapping of Tech Spend and Technology gives a good view of IT spending in 2023 Mapping of Digittal Services across Consumers and Enterprises gives a good view of Telecom spending in 2023 My Other Post on  -"Telecom Industry Australia - Where the Money will be spent in the next two to three years", can be read here .

How Australian Telcos are Outperforming their Global Peers  Globally telecom players are facing cut-throat competition from various players across Tier 1-3 operators and OTT players, here in Australia there is an Oligopoly of operators across fixed lines and mobile, hence services are expensive and they command better margins on their service. Enterprise Value and Market Cap. of NBN in Jan 2023 - Without deferring the debt of $32 Bn. If NBN is sold today it will get around $24 - $26 Bn and that is less than what govt has infused as equity ($29.5 Bn).   Other Key Points: With the highest EBITDA Margin among the major Telecom Players in Australia keen to know why the wholesale price can't be reduced, esp when govt has deferred $32Bn in debt and in effect, IBL is only for $12 Bn.  With the change in direction of NBN rollout from Economies of Scope to Economies of Scale, NBN will benefit across the value chain. Benefits in terms of pro

Australia and Indias Internet Speed Ranking  - 2023    Australia and Indias Mobile Speed Ranking  - 2023  

 Big MacTest for  Price Check on Internet Services in Australia  The Big MAC Index test is a well-known benchmarking tool to test the price parity of services across the globe.  Applying the same to high-speed internet available in the UK, New Zealand and Australia, it has become obvious that Australians pay more for similar speed in comparison to the other two countries.   Source: Economist.com

Has Optus on Recovery Path from Cyber Security Attack    Quick Snapshot of the Performance:  Optus is facing multiple challenges, while it was trying to recover from the losses it suffered during the COVID, it was impacted by a data hacking issue in Sep 2022.   This incident has shrunk their brand equity, and customers have lost faith. Hence, 65K customers have churned; in particular, the Mobile business suffered at least in the short term. Optus have recovered from their loss of 65K in 1-2 quarters, which is not only surprising but commendable. It is worth pointing out that the price rise has assisted in cushioning the effect. Having said that, the data hack has impacted their brand equity and has further strained their finances and balance sheet.  Singtel board and exec team need to make a call if they can recover the brand equity or if it is time to rebrand or sell the business or increase its, MVNO or white label, share like Amaysim. Q3 FY23 Story from Numbers  Impact of cyber

 Telecom Industry Evolution - 1990 to 2023 elecTelecom Industry Operating Model Evolution - 1990 to 2023 From Linear to Agile Telecom Industry Performance -2023  Telecom Industry Growth - Spectrum  Organic and Inorganic Telecom Industry - Todays Setup and Building Blocks