Vocus steps back from consumer NBN

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Vocus steps back from consumer NBN

Vocus has made the decision to step back from its consumer NBN businesses in favour of its renewed focus on wireless and mobile services.

The company said in its half-year results that competing in the consumer NBN market was "economically unattractive" and that the variable nature of NBN's pricing model was incompatible with fixed prices that customers are used to.

As a result, Vocus no longer intends to grow its NBN customer base, and will instead focus on optimising its experience for existing broadband customers. In particular, the company said there was "no profit margin after the costs to migrate, acquire and service, together with backhaul and other admin and operational costs."

Vocus isn't completely pulling out of the consumer market though - far from it. The company said there was "real equity" in its three retail brands: Dodo, iPrimus and Commander, would continue to grow in areas "where it makes economic sense."

Vocus also signed an MVNO deal with Optus in December, allowing the telco to participate in the broadband and mobile market and take advantage of upcoming 5G technology when it's available to the public sometime this year.

CRN sister site iTnews also confirmed that Vocus wouldn't completely retract its consumer NBN bundles, but would instead forgo aggressively pursuing new customers.

The Commander business in particular has received a lot of love in recent months. In November, Vocus took steps to reinvigorate Commander after years of "underinvestment" with new customer retention programs, products and pricing, refreshed branding and a revitalised partner network.

Vocus is just the latest Australian telco to pin its misfortunes on the continued rollout of the NBN. Telstra and Optus have both been particularly vocal about the affect the NBN was having on their financials, the former of which is in the midst of a company-wide restructure to plug an estimated $3 billion whole in its earnings as a result.

The company also reported its financial results for the six months to 31 December 2018, with revenue improving by 1 percent to $974.2 million. The slight bump was thanks to growth in Vocus' Networks business, but was offset by the aforementioned problems with the retail business.

Underlying EBITDA for the half-year was down 10 percent to $170.7 million, while underlying net profit took a 29 percent hit, down to $48.8 million.

Vocus chief executive Kevin Russell said the company's three-year turnaround program was well underway, and that "momentum and change has clearly been established."

"Having closed out my first six-month period at Vocus, I have great confidence in the strategic growth opportunity for our company, with the core of that opportunity being in our Australian infrastructure business, Vocus Networks. This is a 3-year turnaround and our board and leadership team is very clear on the way forward."

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