Optus wants mkt share/price war

Mr Lew the head of Optus is from Singapore/Singtel who own majority share in Optus. His reasoning is simplistic and intended to soften up the Aussie monopoly regulators. I can't conceive the regulators allowing only 2 or even 3 telcos to remain. Four operators would be the minimum imo. Rather than compare telcos with supermkts and airlines, Lew should compare with Aussie banks. Does anyone contemplate regulators would allow one of the big banks to swallow another? I doubt even a TO of BOQ or Bendigo would be allowed. The former head has often said how he regretted allowing Westpac to swallow St George.

So TPM have swallowed iiNet and that will take them 2 yrs to digest. It seems they have lost AMM to their opponents. I can't see Optus or Vodacom beig allowed to TO TPM. It would be against everything they claim to stand for. So forget placing a TO premium on TPM and look at the company based on its fundamentals.

Plus it's now clear Optus intend to get serious re winning more mkt share and expect the price war to ramp-up. TLS are expensive but they won't stand by and allow loss of customers to the opposition. So LWE is right in one regard. The price/turf war about to be unleashed in telco space is similar to that underway between Coles and Woolies. The biggest casualty is MTS/IGA and their SP took a hit today of 17%!! There is no chance of a TO being attempted/allowed by supermkt big guns/regulators... and MTS will have to fend for itself.

TPM have had a dream run. It'll be a lot harder from here on in. SELL.

From BusinessDay
Australia's phone and internet market could become duopoly, says Optus chief

Date June 4, 2015 - 5:55PM
David Ramli

There are two supermarkets and two airlines in the market, so why not a two-player telco market?

Singtel-Optus chief executive Allen Lew has detailed how the company will turn up the heat on Telstra, while telling investors that, much like the supermarket and airline industries, Australia's telecommunications market could end up as a duopoly.
Sources said Mr Lew told a room of shareholders and analysts at Singtel's Investor Day conference in Singapore on Wednesday that Optus would improve its mobile network, partner with more content providers and improve the public's perception of its brand.

And while he didn't indicate the company had any plans to turn Australia into a telco duopoly – a move that would face heavy opposition from competition regulators – Mr Lew did reveal his personal preference for the future of the local industry.

Singtel-Optus CEO Allen Lew says Optus pans to improve its mobile network, partner with more content providers and improve the public's perception of its brand. Photo: James Alcock
"There are two supermarkets and two airlines in the market so why not a two-player telco market?" he reportedly said, referring to the dominance of Woolworths and Coles in the retail space as well as Qantas and Virgin Australia in the local airlines business.
Telstra was Australia's monopoly phone and internet provider until Optus became a viable second-placed challenger by slashing prices and offering attractive new products in the 1990s. Around 83 per cent of mobile customers and 60 per cent of fixed-line internet subscribers are currently using Telstra or Optus services.
Telco wars

The reality is that Vodafone Hutchison Australia would also have to become a much smaller provider in the local market for Mr Lew's prediction to come true. But Vodafone Australia is bouncing back from its network woes and remains on track to see its subscriber base and revenues grow from 2015 onwards.
TPG Telecom is also attempting to buy iiNet for $1.56 billion to become Australia's second-largest fixed-line broadband provider behind Telstra and ahead of Optus.
An Optus spokeswoman declined to comment on Mr Lew's views.
Mr Lew used the event to acknowledge the rising levels of telco competition in Australia, which is set to hurt revenue growth at the company.
He said Telstra customers would be the ideal raiding ground for Optus to gain market share, because Vodafone Australia's customers were more price-sensitive and tended to be more willing to quit their service provider if dissatisfied.
While Telstra was seen by most Australians as having the best and most expensive network, and Vodafone Australia was perceived as running an inferior network that offered better discounts, he admitted Optus lacked clear brand positioning.
This would be turned around through a major improvement in its mobile network and fixed-line offerings as well as a range of new products with smarter, personalised marketing. A single new customer billing and care platform will replace 54 existing systems and data-sharing plans that let families pool download allowances will be further improved.
Optus' deal to give new customers six-month free access to popular streaming video service Netflix was the first of many content deals, he said.
Capex raising

Optus last month announced it would raise its annual capital expenditure from around $1.1 billion to $1.77 billion over the next 12 months in an effort to improve its network and fix its IT systems.
Mr Lew said it would take 12 to 24 months for the public to stop seeing.....

Full article here:

http://www.smh.com.au/business/aust...duopoly-says-optus-chief-20150604-ghgm5b.html