PowerTel is gearing up to be a critical asset to AAPT as the Telecom New Zealand subsidiary shifts its reliance on fixed line to data and readies to launch what chief executive Paul Broad today said would be a "ball-breaker" consumer product.
Paul Broad (Credit: AAPT)
"You'll see we've got some really clever products — two more before Christmas. It'll be very competitive, it will be ball-breaker stuff so to speak," the colourful telco chief told media as AAPT's parent announced a 43.9 per cent fall in full year net profit to AU$324.08 million.
Telecom New Zealand's 2007 acquisition of PowerTel is shaping up to be critical to AAPT's future, in particular for higher margin managed fibre network clients, as its fixed line revenues wane. The buy gave it around a 19 per cent stake in internet service provider, iiNet, which AAPT also has a wholesale agreement with, covering 343 metropolitan exchanges. "It's very exciting," said Broad. "We're finally leveraging our own network."
The only place in Australia that has got fibre to the home is Canberra. And they have got no content. And what do they watch? Porn and parliament. Nothing else.
AAPT chief Paul Broad
2009 was a tough year though, with Broad outlining that "voice was down and data was flat". Fixed line revenues fell dramatically over the past year as 62,000 customers left AAPT. Earnings in the category dropped $60 million from $342 million last year to $282 million this financial year. Revenue from reselling Telstra fixed line services also fell $50 million from $318 million last year to $268 million.
The new focus for the company, which has traditionally been a reseller of fixed line services, will be data, which Broad said he was hopeful would result in improved profitability for the company. "If we don't get the data business and numbers right, we won't be successful. The old voice business we did in the past will not hold the business together," he later told ZDNet.com.au.
AAPT's overall revenues for the 2009 financial year ending 30 June fell 12 per cent from $1.085 billion to $955 million, driven mostly by the large falls in fixed line revenues.
Broad today continued his war of words on the Federal Government's National Broadband Network plan. He said that ADSL2+ technologies attached to copper exchanges already delivered "phenomenal speeds". "We argue a lot; federally, we haven't stretched the limits of what we have got in the ground today," he said, adding that he hoped the government would leave Telstra's copper in the ground.
Broad argued that there was more than enough fibre in the ground and that most people were happy with lower speeds at a lower cost than what the NBN could deliver. He has previously estimated consumers would need to pay $200 per month in order for the NBN to be profitable. As for consumer demand for high speed broadband, Canberra stood out as Australia's only working example and not a shining one, according to Broad.
"The only place in Australia that has got fibre to the home is Canberra. And they have got no content. And what do they watch? Porn and parliament. Nothing else," he said.