NBN the best biz opp for Macquarie Telecom Hosting

Customer service to be the deciding factor in an infrastructure neutral environment

The hosting division of ASX-listed Macquarie Telecom (ASX: MAQ) has singled out the National Broadband Network (NBN) as its biggest business opportunity over the next few years.

Not long after posting considerable revenue growth for the six months to 31 December - 27.4 per cent up on the previous corresponding period to $20.5 million – Macquarie Telecom Hosting managing director, Aidan Tudehope told Computerworld Australia the local economy was limited by existing ICT infrastructure.

“From a hosting perspective the NBN translates as, I suggest, our biggest opportunity that I have seen in a long time,” he said. “Why do I say that? Because at the moment the ICT infrastructure in this country is limited by the lowest common denominator and always will be and that is between the phone exchange and the end user.

“As a result, if I use websites as an example, everyone’s website is built on that average speed – 2Mbps or maybe 512Kbps. As a result, if I pick one of our customers – Cricket Australia – they have to build a website so you can see it at home on a 512Kbps connection. With the NBN we now do a leap frog – you’ll have 100Mbps available for every user.

“Now Cricket Australia could build a website that performs at 100Mbps for all its users. Obviously it turbo charges their business but it also means they are going to be serving more data and they will need more processing. They may even put new systems online where previously the technology didn’t make sense for them.”

Macquarie Telecom Hosting’s facilities are located in the Sydney CBD and since 2001 the company has touted its telecoms capabilities as a competitive advantage to some success. It lists among its clients the Prime Minister’s website and email, broadcaster SBS, and Ninemsn.

But Tudehope said the game going forward would be decided by customer service.

“With the NBN not far away now the whole infrastructure differentiator gets removed,” he said. “Everyone will have access to the NBN. If we are no longer in telecoms competing on technology what are we competing on? Our view, we will compete on customer service. We believe we can run rings around the other telcos, particularly the ones that have decided to cut costs and out source to places like the Philippines and other low cost labour jurisdictions.”

To support this claim, Tudehope pointed to Macquarie’s recruitment rush where it has doubled its team in 18 months and commitment to never outsourcing overseas.

“We are hiring, we are hiring like there is no tomorrow,” he said. “We are buying servers, unfortunately like there is no tomorrow. I’d like to buy less and I think HP still likes us as an account.”

Overall for the six months to 31 December Macquarie Telecom reported net profit after tax for continuing operations of $4.8 million, which was up 67.5 per cent year-on-year. The hosting division now accounts for 37 per cent of the organisation’s business.