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Optus, Telstra battle royale
The battle between Telstra and Optus is set to tick up a notch or two and both telcos aren’t wasting any time in loading up their arsenals. Both have recently made a number of deals, on multiple fronts, to cover all bases and with Optus reportedly gearing up to increase its spend in Australia over the next two years Telstra shouldn’t take its dominance for granted.
Optus last week added completed the acquisition of Vividwireless Group and the deal is a vital one for the telco’s 4G ambitions.
Current LTE technology is divided into two categories: FDD (Frequency Division Duplex) and TDD (Time Division Duplex) technology. Both are technically similar but FDD-LTE uses two separate frequency ranges for uplink and downlink, while TDD-LTE uses a single range of frequencies. While FDD networks are great for covering larger areas, TDD networks provide a great deal more capacity. FDD is also better suited for symmetric applications like voice calls while TDD is better for online browsing.
With a major national LTE-TDD network rollout scheduled for 2013, Optus now has access to up to 98MHz of spectrum in the 2.3GHz band, a band already used by some of the world’s leading operators to provide 4G services.
The telco said that it plans to use this spectrum to build a new 4G network using LTE-TDD technology which will deliver wireless broadband at typical download speeds of anywhere between 25Mbps to 87Mbps. That’s twice as fast as existing competitive 4G LTE FDD technology currently employed by Telstra and Optus in their existing 4G base stations.
Optus is also building two significant LTE-TDD testing facilities in St Marys in Western Sydney and at the Optus Campus in Macquarie Park. The move highlights that the telco’s got its skates on when it comes to rolling out both the LTE-FDD and the LTE-TDD networks and present a compelling 4G alternative to Telstra.
The talent war
On top of that Optus’ recent deal with Vodafone to share crucial infrastructure and boost coverage should also give both carriers a competitive edge to better challenge Telstra’s network coverage supremacy. However, Optus and Telstra aren’t just going head to head solely on the network front.
Optus is investing in Australian IT talent with the telco revealing its Optus Innov8 Seed program last week. The program is aimed at assisting start-ups in the areas of mobility and tech convergence, which are focusing their business on the fields of health, education and media. Optus’ Innov8 has partnered with start-up accelerators, Fishburners in Sydney and York Butter Factory in Melbourne to provide collaborative working spaces for the start-ups that are part of Optus’s program.
Meanwhile, Telstra has its own plans in the local start up scene and the telco’s in-house venture capital team has reportedly made its first big multi-million-dollar investment.
According to The Australian, Telstra has partnered with Village Roadshow to put some money into real-time online restaurant reservations group Dimmi. The outfit launched in September 2009 by Sydney entrepreneur Stevan Premutico is reportedly now Australia’s largest online restaurant booking network and is also preparing to launch BigPond dining, a dining category on the BigPond Telstra internet service.
These aren’t simply vanity projects for the telcos because encouraging new talent to develop new services now can have a meaningful impact on the overall revenue bottom line.
Telcos today run the risk of being beaten to the punch by OTT (Over-the-top) service providers and that pressure is only going to get stronger. The only way to combat that pressure is to provide customers with a highly unified broadband experience – one that combines voice, browsing and services into one seamless offering.
The enterprise equation
The final string in this telco tapestry is the enterprise space and this is one segment where Optus still has plenty of catching up to do. Telstra has made steady progress with its cloud offerings and the telco’s latest alliance with SAP, to tap into German giant’s customer base, is another sign of its growing dominance.
Telstra, in partnership with Accenture, has formally started re-selling a suite of hosted applications from SAP. The telco will provide SAP licensing, network, compute and storage infrastructure, while Accenture will take care of system integration, migration, maintenance and help desk services.
The agreement is the latest move in Telstra’s $800 million cloud services road-map and comes after SAP Australia certified Telstra’s cloud strategy last September, allowing customers who run Telstra applications out of SAP’s cloud to do so.
Google, ACCC set to lock horns again
Moving to regulatory news, the Australian Competition and Consumer Commission is getting ready to once more lock horns with Google, now that the internet search giant has won leave to take the watchdog to High Court. The bone of contention between the two parties is the long running dispute on whether Google mislead consumers with its AdWords advertising.
The final outcome of this stoush could have major ramifications on the global online advertising sector so both Google and the ACCC will come out all guns blazing. While Google had the best of the early going in a dispute that started in 2007, things have decidedly not gone in its favour in recent months, The Federal Court initially cleared Google of any wrongdoing but ACCC’s subsequent appeal was upheld in the Full Federal Court in April this year.
According to that ruling, Google had worked with online sales company, The Trading Post, to ensure that anyone who searched for the phrases ‘Kloster Ford’ and ‘Charlestown Toyota’ would receive highly featured ad links that directed the user to The Trading Post website rather than the dealership’s websites.
Given the high stakes, this should be a keenly contested fight and it will be interesting to see if the ACCC can maintain its recent good form. The regulator has managed to take its pound of flesh from Apple for its 4G misstep and also hit TPG Telecom with a $2 million fine for using false and misleading advertising for its $29.99 unlimited broadband plan.
APN's $66 million online punt
In the online retail space, APN News & Media Limited has acquired a majority stake in one of Australia’s leading eCommerce businesses brandsExclusive.
Under the terms of the transaction APN has taken an 82 per cent equity stake for an up-front investment of $36 million. An additional payment of up to $30 million is contingent on achieving earnings targets for 2013.
The online retailer operates like an online shopping club which partners directly with premium brands to offer exclusive sales to members with heavy discounts off recommended retail prices. Launched in 2009, brandsExclusive is on track to deliver $70 million of revenue this calendar year.
It’s easy to understand why online retail is attracting so much attention, because it is the one sector where there is a real potential for revenue growth. Given the rapid rate of technology adoption in Australia the domestic online retail is primed for growth, however, the real question for APN is whether it can turn this potential into anything tangible?
Diversification into online is a good idea but there are question marks about APN’s lack of experience in the e-commerce sector. The other thing to keep in mind is that the sector is highly competitive with more money flowing into the segment every day. James Packer’s early punts have already paid off and The Australian Financial Review reports that RF Capital, the vehicle for the Roberts family, has acquired three online retailers. The family made its billions through construction giant Multiplex and the paper reports that it has now set its sights online retail.
ICANN gets a new boss; Next DC gets ready to show off its latest facility
In other news, internet domain names body ICANN has a new boss, with the former chief executive of cloud-based software vendor Vocado, Fadi Chehadé, to lead the organisation from October. Chehadé will succeed current president and CEO Rod Beckstrom, who announced his departure last August.
Prior to his tenure at Vocado, Chehadé served as the general manager of IBM’s GlobalTechnology Services in the Middle East and North Africa. He was also the founder and CEO of RosettaNet, a non-profit consortium aimed at establishing standard processes for the sharing of business information (B2B).
Elsewhere, Symantec’s former ANZ chief and Next DC’s latest CEO Craig Scroggie is getting ready to launch the local data centre outfit’s flagship facility in Melbourne next week. Scroggie recently replaced Next DC founder and CEO Bevan Slattery, who has moved up to the joint positions of executive director and deputy chairman.
Scroggie, who has been serving as non-executive director on Next DC’s board for the last 18 months, says that the facility, scheduled for open on July 4, is one of the largest data centre sites in the country at 17,500 square metres and is home to the largest privately-funded rooftop solar power investment in the country. The centre will provide 6000 square metre of technical space and 12 megawatts of capacity to customers.
IT infrastructure provider Thomas Duryea Consulting is expanding its infrastructure offerings to include EMC’s new VSPEX Proven Infrastructure, a move that should see its partners get access to the cloud and computing deployment solutions. Thomas Duryea CEO Andrew Thomas said that VSPEX is a great fit for the consulting firm given that it is company already a partner with VSPEX partners VMware, Microsoft, Cisco and Citrix.
Finally, local cloud outfit Ninefold has added to its ranks, with a new commercial manager and a software development manager joining the team. Optus' former head of commercial marketing Sean Jarman is joining the company as commercial manager, while Shaun Domingo was a technical manager at recently acquired Hyro before coming to Ninefold.