Despite burgeoning competition in the Australian enterprise telecommunications market, Optus's Business division today claimed it was the only credible alternative to former monopoly supplier Telstra. The comments came from Optus Business managing director John Simon, in a presentation in Singapore today to investors in Optus's parent company SingTel.
Despite burgeoning competition in the
Australian enterprise telecommunications market, Optus's Business
division today claimed it was the only credible alternative to
former monopoly supplier Telstra.
The comments came from Optus Business managing director John
Simon, in a presentation in Singapore today to investors in Optus's parent company
SingTel. The slides from the presentation were sent to the
Australian Stock Exchange this morning.
Despite Simon's tough talk he admitted Optus Business only had
around AU$900 million of the estimated AU$6.6 billion business
telecommunications carriage market -- or 13.6 percent.
He claimed Optus was "under-represented" in the middle tier of
companies with between 200 and 2,000 employees, and had a higher
share in the corporate and government segment with 2,000 employees or greater.
Simon said Optus Business was seeing the most growth in the managed
services market, where (not including figures from recently
acquired ICT services company Alphawest) revenues grew 36
percent to AU$38 million for the three months ending 31
In contrast, over the same period, Data and Internet Protocol
(IP) revenue grew only 6 percent to AU$110 million. Voice grew 16
percent to AU$120 million.
"Optus Business's historical focus on scale has delivered 11
percent compound revenue growth ... but margins and cash flow are
under pressure," noted the slides.
Simon said he saw six major technology trends
within his division's customers:
Migration to IP-based virtual private networks
Uptake of Voice over IP (VoIP)
Use of wireless data
ICT managed services
Fixed to mobile migration
Migration to Ethernet
As a consequence of these trends, Simon said his division's
strategy was to bring more of its customers onto its own network.
He said this would be more profitable for Optus than using the
networks of others such as Telstra.
Simon said Optus's ongoing AU$150 million rollout of
consumer-grade ADSL broadband hardware into Telstra's telephone
exchanges would assist with this process.
Optus Business also has access to a fibre customer access
network in some locations in capital cities, and an existing
business-grade ADSL network covering some 150 exchanges.
Some "traditional" data services will be retired, as Optus
focuses on IP-based services, and Simon's division will also
focus on Web-based self-service for corporate networks, with the
aim of generating a better customer experience. The services provisioning process will be also speeded up.
Optus Business will additionally seek to grow its share of the
mid-level (200-2000 staff) market.
Simon sees an opportunity to use his company's Alphawest asset
to support Optus Business to capture new IP-based work.
He said an industry trend away from whole of business
outsourcing and towards selective sourcing was positive for
Alphawest, which remains under the shadow of giants IBM, EDS, CSC
and to a lesser extent Telstra-owned KAZ.