Vocus held its strategy day on 3rd July 2019, detailing its efforts to turning around its business units.
Its core Network Services and Retail units require substantial investment to stimulate revenue and market share growth. Vocus has identified mobile and its subsea cable assets as key drivers for growth.
After two unsuccessful merger attempts in the last month, Vocus needs to ensure it can transform the company.
Vocus has reaffirmed its current state within a three-year turnaround for the company, aiming to deliver sustainable profits from FY20 onwards. The overall telco market is facing challenges across all segments – enterprise is due to be disrupted by nbn’s entry; consumer broadband margins already being squeezed by nbn pricing and becoming unsustainable for smaller RSPs; mobile increasingly competitive as data capacities are reaching unlimited and unique product differentiations needed to attract customers and reduce churn. Despite the challenges, Vocus expects to meet its FY19 guidance figures, reaching between $350-$370m underlying EBITDA.
Since the company’s reorganisation into three distinct operating businesses – Network Services, Retail and NZ – each business is in a different state and requires specific strategic directions. The core Network Services business as the potential to compete for enterprise and wholesale markets, while the Retail business has been struggling and requires immediate reset. Vocus NZ has been the most sustainable performer and has successfully achieved revenue growth across all customer segments.