Hey all,<div><br></div><div>Interesting news from Commsday.</div><div><br></div><div>---</div><div><b>AAPT set to snap up Nextep assets </b></div><div><div><b><br></b></div><div>AAPT is believed to be on the brink of buying up the infrastructure assets of NEC Australia’s Nextep arm, a deal that would see both parties reap significant benefits. </div>
<div><br></div><div>CommsDay has learned that NEC Australia has been exploring the possibility of divesting its wholesale service provider division for weeks if not months, with an announcement now imminent. The sale of Nextep to AAPT would allow NEC to focus on its core objective of dominating the services space, while also turbocharging AAPT’s ongoing infrastructure expansion and national wholesale broadband strategy. </div>
<div><br></div><div>Nextep commands extensive infrastructure holdings; these include more than 90 metro DSLAMs, plus 62 new regional DSLAMs that it rolled out last year along the Regional Backbone Blackspots Programme route. However, Nextep’s negotiations with potential wholesale customers in the relevant areas hit a hurdle when a Telstra wholesale DSL service rezoning eliminated most of the price advantage Nextep would have offered. Other factors, including the ongoing Australian Competition and Consumer Commission review into wholesale DSL regulation, added further challenges. </div>
<div><br></div><div>By March this year, Nextep was exploring its options as a potential wholesale aggregator of NBN services, while still talking with ISPs and other potential users of its existing DSLAM infrastructure – though by that stage, GM Mark Grooby had said that it was unlikely to consider further infrastructure investment. And not long thereafter, the firm began to look at other possibilities; CommsDay understands that the prospect of a sale has been on the table for the last couple of months. </div>
<div><br></div><div>“NEC Australia [has been] carrying out a market sounding to investigate potential opportunities for the Nextep business, including alliances, acquisitions and/or divestment in line with the company strategy,” said the firm. “Employee and customer interests will be priorities with regards to any possible decisions on Nextep’s future.” </div>
<div><br></div><div>Now, though, it’s understood that a deal is imminent, with AAPT lined up as the buyer. The acquisition would be a good fit for the telco; it’s been building out its own exchanges to broaden its reach over the last few months, and Nextep’s infrastructure would substantially accelerate that process. That dramatic bump in network coverage would also strengthen some of AAPT’s key services growth areas, such as its national wholesale broadband strategy – currently operating via a blend of Telstra and AAPT’s own network assets, and primed to leverage NBN footprint as it becomes available. </div>
<div><br></div><div>NEC Australia, meanwhile, outlined a strong focus on cloud and other services earlier in the year, reinforced by the news in late May that it would buy the technology solutions business of ICT firm CSG Limited in a A$277 million deal that would more than double NEC’s local workforce. MD Alan Hyde is intent on making the firm one of Australia’s top five ICT companies, and exiting the wholesale DSL market would help NEC concentrate its resources on that objective - with the sale also giving it capital against potential future acquisitions, for which Hyde has said he’s “still got an appetite.” </div>
<div><br></div><div>Petroc Wilton</div></div><div>---</div><div><br></div><div>Commsday - subscribe if you don't already!</div><div><br clear="all"><div><font face="Calibri"><b><br><br></b></font></div><div><b style="font-family:Calibri;font-size:13px">Skeeve Stevens, CEO - </b><span style="font-family:Calibri;font-size:13px">eintellego Pty Ltd</span></div>
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