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Vocus eyes data analytics investments as fibre rollouts increase

Vocus will 'highly automate' its business by investing in data analytics in order to improve customer experience and take advantage of the 'rich data' being collected.
Written by Corinne Reichert, Contributor

Vocus Communications has said it will be investing more in data analytics and digitising its customer service processes over the next year in order to continue competing in the telecommunications landscape.

"This year, we have decided to invest in our data analytics capability, taking advantage of the forced shift from copper to fibre occurring over the next few years in both Australia and New Zealand," Vocus chair David Spence said, speaking at the telco's annual general meeting on Tuesday.

The aim of this investment is to grow our market share, reduce customer churn by improving the customer experience, and boost our product bundling opportunities in the mass market."

Vocus CEO Geoff Horth also said that the provider would be simplifying its products and making them more reliable through "highly automated" processes.

This would also enable customers to "manage their own experience, and use our rich data sources to be more intuitive about our customers' needs and potential areas of concern", Horth said.

Spence said Vocus is taking full advantage of the National Broadband Network (NBN) rollout across Australia and the Ultra-Fast Broadband (UFB) rollout in New Zealand.

"The rollout of the NBN and UFB places the company on a level playing field to secure new business not only in the mass market, but in the commercial sector," Spence explained.

The Vocus chair also provided an update of Vocus' North West Cable System (NWCS) and Australia Singapore Cable (ASC) project, which came along with its recent acquisition of Nextgen Networks for AU$700 million.

The NWCS, a $139 million, 2,100km fibre-optic submarine cable between Darwin and Port Hedland for the purpose of servicing the mining and offshore oil and gas industries in Western Australia, cost Vocus an additional AU$134 million, with Spence saying that Vocus is "looking for ways to leverage this infrastructure".

The NWCS was switched on in September, with Nextgen saying at the time that it had installed additional capability within the subsea cable that will provide greater resilience for telco services in the Northern Territory, with the cable also able to be extended in future to the Pilbara region and to other offshore locations including the Tiwi Islands.

Spence also said that Vocus will have an update coming soon on the ASC project, originally a AU$170 million 50-50 joint-venture deal between Vocus and Nextgen Networks to construct a 100Gbps 4,600km subsea cable connecting Perth to Singapore and Indonesia that was purchased outright by Vocus for AU$27 million.

"This subsea cable project is of national importance, and a significant opportunity for Vocus shareholders," Spence said on Tuesday.

"Since completing the acquisition of Nextgen, we have advanced this opportunity and will update the market shortly on our progress."

Horth also provided an update of Vocus' infrastructure, and outlined the company's four-part strategy going forward: To continue investing in its fibre network; to be "the most loved telco"; to compete using its efficiency; and to ensure an "engaged and motivated team".

"We now have 30,000km of advanced fibre network, with 23,000km of fibre connecting the length and breadth of Australia," Horth said.

"In addition, we now have excess of 5,000 buildings on net in Australia, and a portfolio of 23 datacentres across Australia and New Zealand."

Lastly, Spence said Vocus is "well progressed" in replacing CFO Rick Correll, who retired in September, and Vocus founder James Spenceley and Amcom founder Tony Grist, who resigned in October as a result of their battle for Vocus leadership with Horth.

"While it is disappointing to see the departing directors leave the board, these resignations are in the best interests of shareholders," Spence said last month.

"We can now move forward with a fully cohesive board and executive team."

Vocus shares fell by 23 cents as a result of the leadership squabble.

Vocus reported a full-year net profit of AU$64.1 million for the 2015-16 financial year, up 223 percent, thanks largely to its AU$1.2 billion Amcom acquisition last June and merger with M2 in February to form the third-largest telecommunications provider in New Zealand and the fourth-largest in Australia, worth more than AU$3 billion.

Statutory earnings before interest, tax, depreciation, and amortisation (EBITDA) were AU$195 million, up 273 percent year on year, on revenue of AU$830.8 million, up a 454.6 percent.

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