Optus has lost ground in the ADSL market over the past few years. It seems this has actually been a deliberate move as 4 years ago Optus decided to discontinue its offering of Telstra resold ADSL connections in favour of promoting its own ADSL & Wireless Broadband networks. John Linton of Exetel is also known for his continual complaints of how there is no money to be made in reselling Telstra services – so this is likely why Optus decided to exit this market.
iiNet (who I like to call iiBorg) last week purchased TransACT for $60 million. The Financial Review blew the whistle on this acquisition before the deal was finalized causing iiBorg to suspend share trading. Naturally, the new iiBorg marketing focuses on “the leading challenger” and “number 2” which strangely always makes me relate iiBorg to faeces (number 1 for urine, number 2 for faeces, number 3 is 2 + 1). This is especially because iiBorg are making a huge deal about gaining position ahead of a carrier who had no interest in remaining at that position anyway. The marketing focus of iiBorg since this news is complete and utter shit.
iiBorg probably bought up TransACT for two reasons. The primary reason would be the ADSL customer base. The secondary reason would be TransACT’s fibre optic network across Canberra and TransACT’s datacentres and fibre optic backhaul in Canberra and Victoria. $60 million to put iiBorg ahead of Optus in ADSL subscribers, and to buy up datacentres and other infrastructure, seems like a deal too good to be true.
But now its no longer Telstra followed by Optus across the Australian telecoms market. Its now only true for the fixed line & mobile telecom markets because of this recent lost ground for Optus. I may even have to rethink my use of “The Big 3” to describe the major 3 carriers Telstra, Optus & Vodafone.
Its also now probably more true than ever that iiBorg is too big of a company to consider using, as a big telecoms company tends to have uncompetitive offerings because their products need to suit everybody in order to remain so big, and big companies can often leave the consumer feeling like “just another number”.
It was also recently revealed that TPG have 4.4% of iiBorg shares, and TPG have stated they have no other interest in iiBorg than their “strategic purchase of shares”. You wonder what their strategy is about and if that involves the acquisition of, or merger with iiBorg, as many have speculated.
