Dodo and iPrimus lead M2 customer growth

Dodo and iPrimus lead M2 customer growth

Summary: M2 CEO Geoff Horth has said that the organic growth of 70,000 broadband subscribers in the last financial year dispels the myth that the company will only grow through acquisitions.

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TOPICS: Telcos, NBN, Australia
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While in recent years many have suggested that the fixed line broadband market is stagnant, with companies only being able to grow their customer bases through bundles and acquistions, M2's CEO Geoff Horth has said that his two consumer ISPs have been able to grow their customer bases organically in the last financial year.

Ahead of the company's full results announcement at the end of August, M2 said that across its consumer, business, and wholesale products, the company had added 71,000 new postpaid services in the second half of the last financial year ending June 30, 2014. M2 operates the Dodo and iPrimus consumer broadband businesses, and the Commander and Engin enterprise businesses.

The result brings the company's postpaid services in broadband, mobile, voice, and energy up to 1.5 million, with close to 500,000 broadband subscribers across the three core business units.

The company's burgeoning electricity product is a strong growth area for the business, growing by 66.1 percent in the year, but Horth told ZDNet that broadband was the company's priority for growth.

"We're growing broadband in every category. It's a really strong growth category for us. NBN is a small part of our total growth story, it's largely ADSL2. It's a combination of on-net and off-net. A little bit of it is because there is growth in the broadband market, but partly it is taking share as well," he said.

"Obviously there's been some questions levelled at our business over the years as to whether we're able to grow organically or just via acquisitions, so this year we were very determined to show we can grow organically."

The company lost 4,000 mobile subscribers in the second half, but this was a massive improvement on the 25,000 the company lost in the first half of the financial year. Horth said that the losses came as M2 prepared its 4G plans, opertating on the Optus network, and cleared out inactive SIM cards.

"Our business had a tough year on mobiles. There was a little bit of rationalisation in the first half, and then in the second half we came out with our new 4G plans and the consequence of that, we've been able to stem the flow," he said.

Following the takeover of Dodo in 2013, and iPrimus in 2012, M2 has been working to rationalise the number of systems down to avoid duplication. Horth said it would still be around 18 months before the company would consider integration fully completed.

"They're fundamentally fully integrated. There are two billing systems behind those brands today because we haven't done that billing system integration, but fundamentally, they operate as a single business unit with a multi-brand strategy," he said.

"We've been integrating billing systems for a long period of time. We have got a program of work that sees us rationalising down to our three core platforms, and that's what our current objective is. Most of that is done in the next 18 months.

"It's not a business that will ever be on a single platform, it's probably two to three BSS platforms across our business because of the different needs of our different brands, and the offers to market."

There were no plans to retire any of the brands, he said.

"We've rationalised a lot of brands along the way. What we've done is picked the best of them. We see Commander, Engin, iPrimus, and Dodo have been in the marketplace for a long time. They stand for different things, so they're not competing with each other," he said.

M2 is also gearing up to offer services on the trial fibre to the basement, and fibre to the node trials being rolled out by NBN Co, Horth said.

"We're signed on to be part of the FttB trials and the FttN trials," he said.

"We definitely see the work with NBN Co now is about setting ourselves up to be technically ready to provision and deliver services, but it's also about testing different sales and marketing methods."

Topics: Telcos, NBN, Australia

About

Armed with a degree in Computer Science and a Masters in Journalism, Josh keeps a close eye on the telecommunications industry, the National Broadband Network, and all the goings on in government IT.

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3 comments
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  • Slow Off the Mark

    Seems they're not that interested in the NBN Fixed Wireless market as no service or plans are yet on offer.
    After over 10 years as a customer of one of their ISPs we now have to switch to a competitor to get this service.
    grump-a1eeb
  • M2 Deserve Some Credit

    It is not easy consolidating brands in a fragmented technology industry. M2 deserve some credit in trying to consolidate their various client segments and product groups. The key will now be to enhance the brand offering and create some stickiness through good value and self-service automation for a customer segment that is notorious for switching and searching for a better deal. AMAYSIM, e.g., have done an excellent job with value seekers but have the benefit of a single brand and a mobile-only focus with a strong platform with Optus.
    ChrisPattas
  • M2 Deserve Some Credit

    It is not easy consolidating brands in a fragmented technology industry. M2 deserve some credit in trying to consolidate their various client segments and product groups. The key will now be to enhance the brand offering and create some stickiness through good value and self-service automation for a customer segment that is notorious for switching and searching for a better deal. AMAYSIM, e.g., have done an excellent job with value seekers but have the benefit of a single brand and a mobile-only focus with a strong platform with Optus.
    www.linkedin.com/chrispattas
    ChrisPattas