Macquarie Telecom's managed hosting business to "reignite" earnings growth

Macquarie Telecom's managed hosting business to "reignite" earnings growth

Chief executive, David Tudehope, delivers 2015 outlook at AGM

Macquarie Telecom chief executive, David Tudehope

Macquarie Telecom chief executive, David Tudehope

Macquarie Telecom will focus on driving its core managed hosting business in 2015 in a bid to "reignite" earnings growth after completing a substantial investment program.

Macquarie Telecom chief executive, David Tudehope, said, in his annual general meeting address, the company had been focused over the past three years on planning and delivering a significant infrastructure program to position the company for future long term.

"I am pleased to say we have succeeded on delivering the capital projects on time and on budget," he said.

"However... there were a number of different factors in fiscal 2014 that at the same time lead to the company posting a small net loss after tax."

"Looking forward, Macquarie Telecom has substantially completed this investment program and now shifts its focus to leveraging those investments to reignite growth in earnings."

The company recorded a net loss of $800,000, down $12.1 million on last year's service revenue of $196.8 million.

This was due to the capital investment program, technology migration of customer to lower cost virtual private Cloud offerings putting downward pressure on hosting earning and rapid customer migration away from higher margin mobile offerings to the company's lower margin platforms.

Tudehope said in order to take advantage of future growth opportunities in Sydney, the company has expanded its hosting capacity by building its second data centre, Intellicentre 2.

At July 31, approximately 1300kW, 33 per cent of final load capacity, was contracted.

In Canberra, the company has invested about $15 million on the construction of Intellicentre 4, which was completed in July 2013, to deliver the Lead Agency Secure Internet Gateway program.

Tudehope said it was the company's priority to deliver Secure Internet Gateway Services to the contracted Federal Government agencies in Intellicentre 4 by the end of first half of fiscal 2015.

"Once complete we look forward to working closely with the contracted Federal Governent agencies to further grow and strengthen our relationships."

"In 2013 the company unveiled its "LAUNCH" Cloud product set allowing customers to transition from higher cost dedicated managed server infrastructure to lower cost virtual private Cloud, a virtualised shared server infrastructure environment.

Tudehope said this had been popular with with the company's customer base in 2014.

"In 2015 we are looking to drive increased performance in the core managed hosting business leveraging this industry move from dedicated managed server infrastructure to lower cost virtual private Cloud and capturing more market share," he said.

He said the multi-carrier offering was now gaining traction with mobile revenue growing in fiscal 2014 for the first time in four years.

"We intend to leverage this unique multi-carrier mobile offering to help drive revenue growth in fiscal 2015 by providing our customers with flexibility, choice and control that this offering provides."

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He said increasing bandwidth from the NBN would elevate the importance of mission critical web applications in business and fuel growth in hosting.

"The NBN open access model means telco competition is focused around customer service and innovation in product and services rather than infrastructure," he said.

"We intend to embrace the opportunities the NBN offers our customers for higher speed business broadband at more affordable prices."

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