Vocus Lose Another Bid and Our Brief Thoughts

This month saw Vocus lose its fourth bidder in two years with AGL withdrawing their latest offer of $4.85 a share. It’s clear that the Vocus revenue stream is complex and there are key divisions of the business that are underperforming. The concerning aspect of the failed bids lies in the small to medium business division and the consumer division and this could be attributed to the operational difficulties merging with M2 services and the many acquired medium-sized telco businesses in the last two years. With many cogs in the machine comes many points of failure.

For the wider Australian telecommunications industry this presents an opportunity to attract consumers and small to medium businesses to more focused service providers. Vocus’ failure in adding multiple service areas shows the complexity of combining areas like commercial PBX phone systems and consumer NBN and the benefit of approaching experts in fields over price point and business mass.

At C2 seeing more and more small to medium businesses turn to flexible solutions for broadband and telephony that don’t require too many moving parts and provide transparency on the service delivery. Services like Vocus SIP Connect still use complex platforms and termination technology that largely miss the growing trends apparent in the market. By contrast Lightweight SIP delivery and software-based PBX’s continue to grow in accessibility and popularity.

We’re hopeful Vocus will achieve it’s ‘3 years turn around’ and become the competitor in the telco market we desperately need.