https://www.odt.co.nz/business/telco...ADTS-puYsY7mi4
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It could well be that the new Vocus owners see further expansion opportunities by buying companies like 2Degrees.
Ultimately though, my view is that Vocus would still be missing the 'secret sauce'. Yes, they would be 'bigger' if they acquire more of the telco players that are smaller than Vodafone and Spark.
But to really compete with Vodafone and Spark, I think owning an asset like Sky would be hugely beneficial. Clearly Spark think the content game is worthwhile, given they have:
1. A wholesale deal with NETFLIX
2. A wholesale deal with Sky for NEON
3. Their own sport offer - Spark Sport
4. A wholesale deal with Sky for Sky Sport NOW (packaged with Spark Sport).
Vodafone have Vodafone TV. They don't appear to have made a huge success out of this so far, and the UX still needs improvements...but it does allow their customers to get cheaper Sky TV packages. I think you can get 'The Works' for as low as $90/month (when it would normally be about $120/month if you had Starter + Entertainment + Sport + Movies + SOHO + MySKY).
Sky UK have been a large success in Europe by packaging their content (core competency) with broadband and mobile.
Vocus can already offer Fibre-Mobile-Energy bundles. If they were merged with Sky it would allow Super Bundles... with a lot of flexibility. Some packages would be tailored to the large base of satellite subs...other packages would be tied to bundles with the streaming services. They would literally have something for everyone.
Now imagine if you are a customer of theirs and your internet, mobile, electricity and Sky content (be it satellite or streaming) is with 'SkyVocus'. How likely are you to switch to Vodafone, even if they might save you $10 per month on your broadband component? I think an entity like this would have the 'stickiest' customers in the industry.
We also need to remember that the comcom hates sky, any merger may throw up the issues that other telcos etc voiced back when vodafone/sky tried it last time.
Plus the decision against Sky-Vodafone was a 50/50 call back in 2018 (according to the decision maker in an interview afterwards).
A lot has changed since 2018. Entertainment has been further fragmented with new OTT streaming services and Spark has proven that Sky does not actually have a monopoly on sport given they so easily launched their own service and picked up a number of high profile events.
No way could the same arguments be used again to block a deal in 2021.
https://www.nzx.com/announcements/368997
Bonds going bye-bye.
just saying what I see....
its only good if they can borrow cheaper right?
(unless of course they dont need to replace it because massive cash flows)
Discl (hold)
I don't think they are planning to borrow at this stage.
They have a $200M facility (untouched) with a banking syndicate. Not sure what the interest rate would be if they needed to use it.
But their $45M CAPEX needs (which covers 'stay in buisness' and growth initiatives) is covered by cash generated from operations.
I think the $200M facility would only come into play if a very large and interesting opportunity came their way.
Unless and until that happens, it will be nice to be debt free. And that is $6.25M less a year in interest charges to look forward to.
Yeah and the cash balance will prob be $30M+ at the FY results, and growing.
Bank facility is just good to have available for unforeseen circumstances (especially with Covid still being a threat) or opportunities that may arise.
Balance Sheet is in mint condition, thanks to the shareholder bail out.
Me looking for another company on the ASX/NZX that is cash flow positive, has no debt, has a growing cash pile, pays no dividends, does no buy backs, and makes no investments or acquisitions.
https://www.youtube.com/watch?v=RqJVa0fl01w