[AusNOG] TPG and iiNet networks merged?

[Mark Newton]

On 3 Mar 2017, at 11:09 AM, Paul Wilkins <paulwilkins369 at gmail.com> wrote:
> 
> I think it's safe to assume that when you buy a company, you have both the right, and an obligation to shareholders, to maximise the return to the business on the assets. So there will have been consolidation from day one, and new services will be deployed on a consistent architecture. The only exceptions being where existing service agreements prevent this.

It’s foolish to look at “maximizing return to the business” from the cost side only, and ignore the revenue side.

Specifically, iiNet and Internode brands have attracted customers looking for different feature sets (and higher prices) than TPG offers. So consolidating in a way which reduces service to the lowest common denominator (as TPG appears to be doing with NBN HFC products) risks returns to the business by reducing high-margin revenues.

I assume at some level that TPG has run some numbers and decided that the business services they lose by withdrawing from that market are worth less than what they hope to gain by efficiencies. I have no idea if they’re right, but I do have a pretty good understanding of the ARPU difference between business and non-business customers; I think they'll have to cut the knife uncomfortably deep to make up the difference.

  - mark