Ann: Sale of fixed line broadband customer base, page-7

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28/10/18

08:43

Post #: 36287422
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Originally posted by bayview: ↑

"What I don't get is how can Southern Phone which was formed and is still owned by 35 local councils in NSW and employs a headcount of 160 profitably serve those 15k broadband customers to be acquired from AYS when the latter failed to do so despite its highly efficient do-it-yourself technology platform? When did government-owned labour-intensive businesses actually become more cost-effective than young innovative disruptors with highly automatized processes hosted in the cloud? Why would anyone pay $3m for AYS' broadband business converting into $200 per customer when that segment has actually been incurring losses, especially for a rather price-sensitive customer base?"

Those are questions for David Joss (MD) & the independent board of directors of Southern Phone.

"Southern Phone Company Ltd is an unlisted public company and only Local Councils can be shareholders. This means all profits are returned to the community through the Local Councils. No individuals may own shares in the Company".

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My guess is that Local Councils have significant Communications expenditure, and their goals is to reduce or their overheads by increasing scale. They dont need to run at a profit to be beneficial to the owners (councils).

They have a good base of support and are geographically diversified to cover many NBN POIs, i think its a good news story.

AYS Price at posting: $1.15 Sentiment: None Disclosure: Not Held
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Ann: Sale of fixed line broadband customer base, page-7

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