Brand Value and Positioning Changes in Australia

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

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 

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• NBN Co’s Revenue has increased by 4% in FY23 and is facing headwinds for increasing 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 been 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 increases through the SAU. The next revision is to be submitted soon.
• Today ARPU is $47 (Residential, stagnant), and FY24 ARPU is $49 (sub-SAU approval)
• Heading for profit (NPAT) without a soft write-off of $32 Bn in H1 FY25. With the write-off, it could be Profitable in FY 24. 
• NBN’s Enterprise Value has risen from $25 - $19 Bn to $36 - $29 Bn and will be heading northward of $40 Bn if SAU with a price increase is accepted in FY24. A good prospect for the government as it prepares to offload its investment after FY25.  
• The total cost of ownership TCO of NBN in 2023, using ICRA, is A$76Bn+, and without ICRA consideration, it is >A$59.9BN

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NBN Co's Total Cost of Ownership (TCO) from 2010 to 2023

• NBN was established to reduce the digital gap in Australia by making high-speed internet (>100 Mbps) affordable and removing Telstra's monopoly in fixed-line access. While NBN has succeeded in removing Telstra's monopoly, it's disheartening to see that they have failed to reduce digital exclusion by providing affordable high-speed internet.
• After investing A$76Bn over 14 years, Australia's average fixed internet speed ranks 81st globally at 53 Mbps, lagging behind many other countries in terms of internet connectivity.
• 75% of Australians are consuming the internet at a speed of 50Mbps or less.

Source NBN Co, AFR, Reuters, ACCC

How Digital Transformation can Transform Energy and Utilities

How Energy and Utilities Can Transform

Response from GenAI tool ChatGPT:

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The transformation of the energy and utilities sector is a complex and ongoing process driven by technological advancements, environmental concerns, changing consumer expectations, and regulatory changes. This transformation is often referred to as the "energy transition" or "utility transformation." Here are some key ways in which the energy and utilities sector can transform:

• Transition to Renewable Energy: One of the most significant transformations in the energy sector is the shift from fossil fuels to renewable energy sources like solar, wind, and hydropower. This transition reduces greenhouse gas emissions and promotes sustainability.
• Decentralisation: Traditional energy systems were centralized, with power generated at large power plants and distributed through a grid. The future of energy includes more decentralized systems, where individual homes and businesses generate their own power through solar panels and wind turbines. This is known as distributed energy generation.
• Smart Grids: The development of smart grids enables more efficient and reliable distribution of electricity. Smart grids use digital technology to monitor and manage the flow of electricity, optimise energy usage, and integrate renewable energy sources seamlessly.
• Energy Storage: Advances in energy storage technology, such as batteries, are crucial for the integration of intermittent renewable energy sources. Energy storage helps balance supply and demand, ensuring a stable energy supply even when the sun isn't shining or the wind isn't blowing.
• Electrification of Transportation: The transportation sector is gradually transitioning from internal combustion engine vehicles to electric vehicles (EVs). This shift creates opportunities for utilities to provide EV charging infrastructure and manage increased electricity demand.
• Energy Efficiency: Utilities and consumers are placing greater emphasis on energy efficiency measures, from energy-efficient appliances and buildings to industrial processes. This reduces energy waste and lowers overall energy consumption.
• Grid Resilience: Climate change and extreme weather events pose a threat to energy infrastructure. Utilities are investing in grid resilience to ensure the continued delivery of electricity even in adverse conditions.
• Customer-Centric Services: Utilities are focusing on improving customer experiences by offering services like real-time energy consumption data, flexible pricing plans, and energy-saving tips through digital platforms.
• Regulatory Changes: Government policies and regulations play a crucial role in driving energy and utilities transformation. Regulations may incentivize renewable energy adoption, set emissions reduction targets, or mandate energy efficiency standards.
• Emerging Technologies: The adoption of emerging technologies like blockchain for energy trading, artificial intelligence for grid optimisation, and quantum computing for advanced energy modeling can further transform the sector.
• Environmental Sustainability: Utilities are increasingly committing to sustainability goals, including reducing carbon emissions and transitioning to carbon-neutral or carbon-negative operations.
• Community and Microgrids: Smaller-scale energy systems, such as microgrids, can provide localized energy resilience and support communities during power outages.
• Partnerships and Collaboration: Collaboration between utilities, technology companies, governments, and research institutions is essential to accelerate the transformation and share best practices.

The transformation of the energy and utilities sector is a multi-faceted process that involves various stakeholders, from governments and utilities to consumers and technology providers. It is driven by a combination of economic, environmental, and technological factors, and it will continue to evolve as new innovations emerge and the world seeks sustainable energy solutions

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Digital transformation is playing a pivotal role in reshaping the energy and utilities sector. It offers innovative solutions to improve operational efficiency, enhance customer experiences, and address sustainability challenges. Here's how digital transformation can transform the energy and utilities industry:

• Smart Grids: Digital technologies enable the development of smart grids that incorporate sensors, real-time data analytics, and automation. These grids enhance grid management, reduce energy losses, optimise energy distribution, and accommodate renewable energy sources more efficiently.
• Energy Management and Optimisation: Digital tools and data analytics help utilities better understand and manage energy supply and demand. Predictive analytics can forecast energy consumption patterns, enabling utilities to optimise energy generation and distribution.
• Grid Resilience: Digital technologies enhance the resilience of energy grids. Predictive maintenance using IoT sensors and analytics can identify potential equipment failures, reducing downtime and improving grid reliability, especially during extreme weather events.
• Renewable Energy Integration: Digital solutions help integrate intermittent renewable energy sources like wind and solar into the grid. Advanced forecasting, demand response, and grid balancing algorithms ensure a stable and efficient energy supply.
• Decentralized Energy: Digital platforms facilitate the deployment of decentralized energy solutions like microgrids and peer-to-peer energy trading. Consumers can produce, store, and sell excess energy, leading to more resilient and sustainable energy ecosystems.
• Customer Engagement: Digital transformation enhances customer engagement through online platforms and mobile apps. Customers can access real-time energy usage data, receive personalized energy-saving tips, and choose flexible pricing plans, promoting energy efficiency.
• Energy Storage Management: Digital tools monitor and optimise energy storage systems, such as batteries, for grid balancing and peak load management, increasing the reliability of renewable energy sources.
• Asset Management: Utilities use digital asset management systems to track the performance of infrastructure and equipment. Predictive maintenance based on data analytics reduces downtime and extends the lifespan of assets.
• Cybersecurity: As digitalization increases, cybersecurity becomes critical. Utilities invest in cybersecurity measures to protect critical infrastructure from cyber threats, ensuring the security and reliability of the grid.
• Data Analytics for Sustainability: Digital platforms allow utilities to collect and analyze vast amounts of data related to energy production and consumption. This data is crucial for making informed decisions about sustainability goals, emissions reductions, and resource allocation.
• Electric Vehicle Integration: Digital infrastructure supports the growth of electric vehicles (EVs). Utilities can offer EV charging stations, manage EV charging load, and provide incentives for off-peak charging.
• Regulatory Compliance: Digital transformation aids in meeting regulatory requirements efficiently. Utilities can use data analytics to track and report on emissions, energy efficiency, and renewable energy integration to comply with environmental regulations.
• Energy Market Participation: Digital platforms enable utilities to participate in energy markets more effectively. They can engage in real-time energy trading, offering surplus energy to the grid during peak demand.
• Workforce Management: Utilities can use digital solutions for workforce management, scheduling, and training to improve field operations and response times.
• Supply Chain Optimisation: Digital tools assist in optimising the supply chain for equipment and materials used in energy infrastructure projects, reducing costs and lead times.

In summary, digital transformation empowers the energy and utilities sector to operate more efficiently, adapt to changing energy landscapes, reduce environmental impacts, and provide customers with enhanced services and experiences. It plays a vital role in shaping a more sustainable, reliable, and resilient energy future.

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My post on How Telecoms Can Transform and Why Telcos are Struggling to Generate ROI

Digital Services Landscape and Opportunity for Telecom in Australia

Exploring the Digital Services Landscape and Opportunities for the Telecom Industry in Australia.

Consumer:

• Financial Services across Insurance, e-commerce and Fintech have an addressable market of > $100 Bn and Telcos are eager to increase their wallet share to the mid-20s. 

Enterprise: 

• The potential for growth in areas like IoT and Smart places is immense, with minimal infrastructure investment required in comparison to 5G. 
•  Private 5G and SD-WAN are currently in high demand across various industries including Mining, Tourism, Energy, Heathcote, and Supply Chain. These verticals are the focus due to their increasing need for advanced technological solutions.

My previous post on IT Services Opportunity across the Telecom Industry  

Australia is Lagging in Internet Speed While Price is going Up

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 speeds 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 

Telecom Industry Australia - IT Opportunity for Software and Service Providers

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.

Cloud Adoption Juggernaut

 

Why Two Sided Matrix is Still Popular for Strategy and Management Consulting

 Why Two-Sided Matrix is Still Popular for Strategy and Management Consulting  

Source: Mckinsey, BCG, Sales Academy, Forrester

Starlinks Growing Presence in Australia - Reducing Digital Divide in Rural Australia

Starlinks' Growing Presence in Australia's Telecom Sector and Transforming Connectivity in Remote Areas. 

Source AFR:

Telstra announced a deal to offer internet and voice calls via Mr Musk’s Starlink service on Tuesday, which uses a constellation of small, lower-orbiting satellites providing faster speeds than the NBN Sky Muster. 

Telstra’s broadband deal with Starlink is non-exclusive, meaning the challenger could still pitch its services to NBN. However, Telstra has exclusivity in providing voice call services through Starlink.

Optus Deal

The second-largest Australian telecommunications company announced a deal on Wednesday that will let users access the internet and make calls on their phones via Starlink’s satellites from late 2025. 

Beaming signals from space would also help Optus compete with Telstra’s superior regional tower network. The Optus-Starlink partnership also poses a risk to the NBN Co because the same SIM cards that a phone uses to connect to a satellite could also be used by households for home internet. 

That will only come into play if the capacity is high enough because home internet usage is typically much higher than mobile phone data. 

Standard NBN services used an average of 452 gigabytes of data a month last year, those on fixed satellite connections used 189 gigabytes, while mobile users consumed just 14.5 gigabytes, according to ACCC data. 

 The deal with Starlink was intended to be a new product aimed at mobile phone customers and would not require a new device to connect to the service when they left an area with the signal from ground towers. Asked whether Optus’ deal was exclusive, Mr Williams said: “This is a unique experience that Optus customers will have.” 

 Optus plans to start its Starlink service capacity for text messages in late 2024 before expanding to voice and the internet towards the end of 2025. It has not announced how fast the connections will be, except that they will be transmitted via the latest generation 4G system or their pricing.

Negotiation By Earthy Natives and How they Behave as a Seller and Buyer

 Negotiations - Influence to Win

The business-to-business (B2B) sales negotiation is a conversation between a seller and a buyer to reach an agreement beneficial to both. To achieve a zone of potential agreement (ZOPA), both engage in multiple rounds of discussion. The back-and-forth nature of these discussions is driven to gain the upper hand over the other side by finding their reservation point (breaking point), BATNA (Best Alternative To a Negotiated Agreement), and any helpful information that will assist in bargaining.

In sales, to influence and win negotiations, a lot of preparation is required. This includes collecting information about the other side's negotiation style, motivation, risks, BATNA, concession, reservation, and timing. Without preparation and gathering of this information, the chances of winning negotiations are minimal. Sometimes, even after gathering information and practice, negotiations can still be lost or suspended indefinitely because of changes in the political landscape, financial upheaval, change in priority, a pandemic outbreak, or other unseen factors. 

The gathering of information and preparation for negotiations is time-consuming and is often challenging. Elements of nature and their attributes are applied to overcome this difficult task of preparing the groundwork for influencing and winning negotiations.

Let us explore how a seller or a buyer leverages elemental attributes learned in previous sections to position and influence their respective stakeholders with the intent to win.

Earth Natives Negotiation

 

Earth means Nurture, Clamness and Stability

Negotiation Behaviour 

o they speak slowly with a deep voice

o they are good listeners and have a lot of patience

o fear of failure makes them hide information 

o they lack transparency and principles

o often can be deceptive or employ dirty tricks like psychological warfare and pressure tactics

o they are sluggish in their responses and only respond when necessary 

o they are accommodative and let others take control 

Argument  

o they are emotionless and have an advisory tone

o impresses upon care and nurture during the discussion

Motivation 

o being lazy, they prefer that the status quo is not challenged 

Concession 

o being fixated, they are not open to making concessions easily 

Reservation 

o being secretive, they don't share their reservations easily or like to hide their reservations to use them later in the bargaining mix     

Positioning 

o they are driven by the status quo instead of being disruptive

Risk Appetite

o is moderate (ref: risk rating is 'moderate') 

o hard to find gaps in their risk mitigation strategy, the opposite side will find it challenging to take advantage  

Secrecy

o they are highly secretive

o they hide information and details   

Information Gathering

o they are good at gathering information

o they rely on their friends or social circle

Preparation 

o fear of failure drives them to prepare thoroughly; attention to detail is good

Objection Handling

o they are open to grievances and will listen patiently

o objection mitigation is primarily anchored at themes like delivery, reliability, care and nurturing

Time  

o they are fixated on their anchoring, cherish long-drawn negotiations

o they use time as a means of bargaining   

Comms Style

o they are slow in communication and respond at their own pace 

o they are good listeners

o they are structured and semantically driven

o they speak with gravitas and purpose and carry a deep voice 

BATNA

o they are secretive and don't open up in conversations 

o they prefer to have alternatives or options 

Price

Reservation and Target Price 

 their secretive nature makes it nearly impossible to know their price range or preference 

 they are good at disguising their intentions 

Offers 

 they prefer multiple offers to negotiate, which keeps the other side guessing; it's a grind for the opposite side 

 fond of hoarding means bundling pricing with freebies will appeal to this type of buyer      

Environment To Influence 

o being lazy, they prefer an indoor environment or a place with a relaxed setting, like to have friends or supporters during the conversation, earthly natives prefer to hoard things so giving freebies (e.g., from marketing events) can assist in influencing

More can be read in the book at amazon.com

 

    

 

Sellers from Mars and Buyers from Venus - Negotiations by a Attractive and Action Centric Seller and Buyer

Negotiations - Influence to Win

The business-to-business (B2B) sales negotiation is a conversation between a seller and a buyer to reach an agreement beneficial to both. To achieve a zone of potential agreement (ZOPA), both engage in multiple rounds of discussion. The back-and-forth nature of these discussions is driven to gain the upper hand over the other side by finding their reservation point (breaking point), BATNA (Best Alternative To a Negotiated Agreement), and any helpful information that will assist in bargaining.

In sales, to influence and win negotiations, a lot of preparation is required. This includes collecting information about the other side's negotiation style, motivation, risks, BATNA, concession, reservation, and timing. Without preparation and gathering of this information, the chances of winning negotiations are minimal. Sometimes, even after gathering information and practice, negotiations can still be lost or suspended indefinitely because of changes in the political landscape, financial upheaval, change in priority, a pandemic outbreak, or other unseen factors. 

The gathering of information and preparation for negotiations is time-consuming and is often challenging. Elements of nature and their attributes are applied to overcome this difficult task of preparing the groundwork for influencing and winning negotiations.

Let us explore how a seller or a buyer leverages elemental attributes learned in previous sections to position and influence their respective stakeholders with the intent to win.

Fire Natives Negotiation

Fire means Action and Excitement

 

Negotiation Behaviour  

o fire represents the heart, so these natives interact with honesty and openness; the sharpness of fire is reflected in their sharpshooting style conversation

o they have no hidden agenda and lose their cool if the opposite side is not transparent

o they lack depth in conversation 

o they use charm to impress upon others

o they are competitive and like to take control of the conversation 

Argument

o fire being sharp, they are data-driven and emotionless

Motivation

o to get the limelight from winning a deal or to be seen as visionary 

Concession 

o they are open and transparent in making concessions through the bargaining mix

Reservation

o they are open and willing to share their own reservations during the conversation with the other side

Positioning 

o futuristic and innovative, new beginnings or new business

Risk Appetite 

o is higher

o gaps can be found in their risk mitigation approach, and the opposite side can identify these gaps to negotiate

Secrecy 

o being impulsive and talkative, it's tough for them to hide information   

Information Gathering

o they are not research-driven, so they struggle with information gathering

Preparation

o they are impulsive and always appear to be in a hurry; thus, they miss attention to detail and often lack comprehensiveness in their preparation

o they rely on their charm and brilliance

Objection Handling 

o they are open to grievances

o they don't address the root cause of the objection because they lack depth and are impulsive

o they get emotional and angry on too many objections 

o their objection mitigation is anchored at themes like innovation and opening new revenue stream

Time

o being agile and impatient, they prefer to wrap up negotiations swiftly 

o they don't use time as a means of bargaining 

Comms Style 

o they are swift and use strong words

o they prefer lots of visuals and data

o they respond immediately and expect the same from the opposite party 

o they are prone to making mistakes 

BATNA

o because they open up in conversations quickly; therefore, they end up sharing information with the opposite side

o it's difficult for them to leverage this option (to use an alternative)

o they often prefer not to apply BATNA 

Price

Reservation and Target Price - their openness and purity make it hard to hide this information from the opposite side; therefore, they end up signalling their range or preference and letting the opposite side gain higher bargaining spread

Offers - don't believe in the multiple or back-and-forth nature of making an offer; they prefer to make one or two offers only

Environment To Influence 

o fire requires air (oxygen) to ignite and spread; therefore, an external environment or a well-ventilated indoor environment is preferred for influencing a fiery native

More can be read in the book at amazon.com

 

Next Generation Digital Transformation - Beyond Analog and Digital Revenue to Digital Commerce

Next Generation Digital Transformation - Beyond Analog and Digital Revenue to Digital Commerce

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My Previous POV from 2012 on First Generation Digital Transformation

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Salesforce and Google Cloud Deal What it Means

Salesforce and Google Cloud Deal What it Means

Source: Seekingalpha.com

How Australian Telcos are Outperforming their Global Peers

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 services.

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 product rationalisation, workforce harmonisation,  vendor consolidation, IT simplification, and more.
• IT will benefit from this shift by reducing the OPEX profile enabled by simplicity, standardisation of data, and boundary-less information flow. The new CIO has the depth and expertise in the IT and Telco domains to make this transition swiftly. 

EBITDA Margin and Volatility of Stock 

 

NBN has the maximum EBITDA Margin, and NTT has the least. Operators with the least margin and with struggling operations will have declining OPEX dollars and will free up Cash for digital transformation dollars. Hence, the Vendors will target them.

Verizon and Telstra are the least volatile stocks, whereas NTT and CISCO are the most volatile. Stocks with less volatility are good candidates for dividend earnings and have stable market conditions, where long-term initiatives can be executed.

IT Services Opportunity in Telecom - 2023