(Australian Associated Press)
Vocus Group says it is shifting its focus from the “complex and economically unattractive” NBN in favour of offering customers 5G fixed wireless.
The company said on Wednesday that, with fixed wireless plans simpler and cheaper to operate, it is looking to move towards such a plan for its Commander, Dodo and iPrimus internet brands.
Vocus says that the NBN is “currently not economic or sustainable in the consumer market” and it won’t look to grow its NBN market share, currently at 6.9 per cent.
It said the variable nature of the NBN pricing structure is incompatible with the fixed prices paid by consumers, and the NBN had too much administrative and operational complexity.
NBN was also too expensive and “cashflow negative” after providing consumers with modems and other administrative and operational costs.
“NBN pricing is simply too high,” the company declared in a slide in a presentation to investors.
The Australian Competition and Consumer Commission last year ordered Vocus to provide compensation to over 5,000 customers who didn’t receive advertised speeds.
The economics of the business market is “slightly better” than the consumer one but still has issues, Vocus said.
Vocus said 5G offers more opportunity, lower cost and is arguably a better product.
The telecommunications company signed an strategic partnership with Optus in December and is keen to expand that pact to include a fixed wireless offering.
Optus is currently accepting “expressions of interest” for a $70 a month 5G home broadband plan it will launch midway through the year.
Vocus indicated it prefers its strategic and commercial partnership with Optus rather than accepting whatever price is set by a government monopoly.
Vocus said its underlying net profit was down 29 per cent for the half-year that ended December 31, to $48.8 million.
Its revenue increased one per cent, to $974.2 million.
Vocus, which is in the middle of a three-year turnaround, did not declare an interim dividend and won’t until it reduces its debt further.
As of December 31, it had $1.09 billion in net debt.
Vocus shares were up 6.13 per cent, or 21.5 cents, to $3.725 at 1352 AEDT.