World News – AU – Aussie Broadband shares double of ASX debut

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Aussie Broadband’s share price nearly doubled on the company’s first trading day on Friday, as investors were bullish on retailer NBN’s prospects in what is generally a notoriously unprofitable sector

Managing Director and CEO Phillip Britt said he was « delighted » with the result « Blown it away Incredible result, » he says

The initial public offering offered 40 million shares at $ 1 each, of which 75% to institutional investors and 25% to Australian broadband customers At market close, the shares were trading at 1 $ 91

The first closing price raised the company’s market cap to $ 190 million The company’s original investors are still heavily invested in the company, including Mr. Britt himself who owns a little over 10%

Aussie Broadband’s core service is NBN Retail, a notoriously low-margin business about which many second-tier telecom operators have abandoned Telstra, by far NBN’s largest retailer, has repeatedly complained that the high wholesale price means he struggles to make money by reselling NBN

M Britt said the Aussie Broadband overcame this problem by charging at the higher end of the scale and improving efficiency through its automation systems. Aussie Broadband sells NBN’s most popular 50 megabits per second plan for $ 79 per month TPG, in comparison, charges $ 69.99

« We see ourselves as a software company that makes very good automation systems, and sells high speed, » he said, adding that automation allowed him to reduce his own costs and to provide competitive customer service

M Britt said he believes Aussie Broadband’s selling point is a smooth customer experience, which includes a delay of a few minutes between signing up and signing in, where no onsite work is required.

M Britt said the capital raised would be used « to accelerate infrastructure development, acquire new customers and expand its commercial product offering »

This will include laying its own fiber optic link to 76 of the NBN’s 121 interconnection points, which means it will not have to lease the backhaul fiber access from Telstra He estimates the cost of this construction, which began in May, at $ 67 million

In addition to the savings on rental costs, this investment will also allow Aussie Broadband to serve business customers with its own fiber, rather than using fiber from NBN or another operator, which will provide better margin Companies represent around 15% of the company’s clientele

« Our own fiber in the ground is at the heart of our approach to the business. It means we can control quality and further improve our customer experience, and it means we can start reducing our link costs » said M Britt

Aussie Broadband was formed in 2008 with the merger of two Victorian companies – Wideband Networks, founded by Mr. Britt and her partner John Reisinger in the Latrobe Valley, and Westvic Broadband, based in Warrnambool The IPO was managed by Shaw and Partners

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Aussie Broadband ASX

World News – AU – Aussie Broadband shares double of ASX debut



SOURCE: https://www.w24news.com/news/world-news-au-aussie-broadband-shares-double-of-asx-debut/?remotepost=423070

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