Vocus poised to become number-two network operator by 2021, predicts GlobalData

HYDERABAD, India, Aug. 28, 2020 /PRNewswire/ --

• Vocus, at current momentum, could become the second largest network operator by 2021
• The telco industry globally is facing headwinds and disruption from multiple fronts
• Vocus is regaining investor confidence through strong focus on enterprise segment and strategic partnerships

Vocus is one of the telcos that have grown rapidly through merger and acquisitions (M&A) to become a business generating A$1.8bn revenue annually. It had encountered a few hiccups along the way, missing financial targets, losing nearly the entire management team and experiencing high customer churn. However, with a new management team and an overriding focus on execution, Vocus is not only regaining investor confidence and but also set to emerge as the second largest network operator by 2021, predicts GlobalData, a leading data and analytics company.  

Siow Meng Soh, Research Director, at GlobalData, says: "The Australian telco market like many other mature markets is highly competitive and facing disruption from multiple fronts. In particular, the implementation of the National Broadband Network (NBN) has leveled the playing field and dramatically changed the competitive landscape. The NBN has also motivated several M&As to create telcos with larger economies of scale. But this has also created challenges such as disparate backend systems, branding issues and legacy processes."  

To surmount the challenges, Vocus has done well in three areas — focused on the lucrative enterprise segment instead of targeting the consumer mass market where differentiation often comes down to price; strengthened its fixed network using software, cloud and automation; and partnered with companies like Zoom, Google Cloud, Fortinet and The Migration Company to grow, differentiate and challenge the incumbent suppliers.

Within the enterprise segment, Vocus is clear about which company to target based on its network assets and services capabilities. The sweet spot is in serving customers with between 1,000 and 2,000 employees as well as key industry verticals including government, health and mining.

While Vocus' retail business is still declining, the company has gradually slowed down the decline. The company expects its enterprise business to maintain growth momentum in the current financial year to deliver growth.

Soh concludes: "If Vocus is able to maintain its momentum, which is likely due to a strong Q4 in FY20, healthy request for proposal (RFP) activity and Australia's insatiable appetite for bandwidth, it will become the second largest network services provider in the enterprise segment by the end of FY21."   

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Analysts available for interview. Please contact Aarti Chandrseker at the GlobalData Press Office for comment on [phone]/ [phone] or email: [e-mail].

 

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