MacTel announces government cloud expansion

Macquarie Telecom has announced datacentre capacity expansions, as well as government cloud and cybersecurity growth to the tune of an additional AU$1.5 million in opex.
Written by Corinne Reichert, Contributor

Macquarie Telecom has announced an expansion in its cloud and cybersecurity offerings for government agencies, with the provider reporting a rise in net profit 20 percent to AU$17 million for FY18.

Earnings before interest, tax, depreciation, and amortisation (EBITDA) rose 19 percent to AU$47.8 million on revenue of AU$233 million, up 6 percent -- AU$95 million from hosting and AU$142 million from telecom.

For the company's Macquarie Government business arm, it revealed that 42 percent of federal government agencies had contracted with Macquarie as of June 30, thanks to its Australian Signals Directorate (ASD) protected-level ASD cloud certification.

"Leveraging the 42 percent of the Australian government who have contracted with Macquarie Government, the Government team will be focused on growing revenue in both cybersecurity and secure cloud computing," the company said in its results report.

"Continued demand from our federal government agencies for secure cloud, including from Tier 1 agencies like ATO, gives great confidence for future growth in the Government business.

"Accordingly, there will be further investment in expansion in Canberra and our cloud platform, with an increase in opex of around AU$1.5 million."

Across its telecom business segment, the company claimed that it is now the number one software-defined wide-area networking (SDWAN) company in Australia, and said it will continue investing in new SDWAN technology.

MacTel added that during the year, it "successfully insourced" its network operations centre, and achieved double-digit revenue growth in its mobile business.

On its AU$100 million six-year deal with the National Broadband Network (NBN) company to provide telco and data services to business customers, Macquarie Telecom said it expects its first customers will commence billing in Q2 of FY19.

"The services offered under this six-year agreement will include dedicated, Australian-based NBN service delivery, assurance, and support staff for Macquarie customers," the company explained.

Macquarie Cloud Services, meanwhile, is now the leading provider in Australia for hybrid IT for corporate IT and software as a service (SaaS), it said, and will expand its Hybrid IT Cloud node in Perth.

Macquarie Cloud Services had also launched a new health information cloud service in June, with Macquarie Launch Health Cloud developed in response to a policy decision by the Department of Human Services (DHS) on third-party software connecting to online services such as online Medicare claims payments.

"Through the updated policy, the DHS is demonstrating how it is possible to transform ICT while at the same time elevating cybersecurity standards," Macquarie Cloud Services group executive James Mystakidis said in June.

"This is particularly relevant as there has been a lot of talk about how supply chains can create cybersecurity risks. This is an example of how the government can use its supply chains to push secure transformation through an industry.

"Australians will -- for the first time -- be able to be assured their data moving from a health software company's cloud services into the Medicare system will be protected end-to-end to the same standard."

Macquarie Telecom this week also announced extending its datacentre services deal with an unnamed "Fortune 100 customer" that has signed up for an additional 1.4MW of capacity.

As a result, MacTel said it will invest around AU$8.4 million in datacentre electrical, mechanical, and plant over the next eight months to increase capacity to be ready for the customer by Q4 of FY19 in Intellicentre 2.

Due to all of these investments -- and what it called the "next significant phase of capital intensive growth investment" -- Macquarie Telecom said it will cease paying dividends as of the first half of FY19.

Earlier this month, it had announced an expansion of its Sydney datacentre, with its Macquarie Park Intellicentre to become a 43MW campus in a staged process.

Capacity at Intellicentre 3 (IC3) East will be expanded from 10MW to 26MW, Macquarie Telecom said, and IC3 West will add a further 17MW.

The expansion of IC3 is expected to cost between AU$75 million and AU$85 million in capex during 2019, which will be partially offset by a 20-year lease agreement to the value of AU$26 million to AU$36 million with Keppel DC REIT. The remainder will be financed via a structured debt in the first quarter of FY19.

"The first data hall in the new Intellicentre Campus will achieve practical completion in late calendar 2019 with an opening day mechanical, electrical, and plant (MEP) of 2.4MW. Further investment in MEP will be funded by the debt facility," Macquarie Telecom added.

"The new datacentre will be a Tier III+ facility with an Australian leading PUE of 1.28. It will be certified by Uptime Institute, built to meet Australian government physical security standards, ISO 27001:2013, and support the delivery of credit card payment environments," Macquarie Group executive David Hirst said at the beginning of August.

In September last year, Macquarie Telecom's government-focused arm was also added to the New South Wales government's GovDC Marketplace, allowing it to provide cloud and cybersecurity solutions to state government agencies.

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