Vocus reveals 'clear growth plan' for $1B investment program

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Kevin Russell (Vocus Group)

Credit: Vocus Group

Vocus has unveiled new details regarding its five-year investment plan for its enterprise arm, Vocus Network Services (VNS), claiming it will cost the telecommunication services provider “close to” $1 billion.

Speaking at the CommsDay Summit 2022, Vocus CEO Kevin Russell said the provider has a “clear growth and investment plan” and is focusing on a variety of different markets.

This includes digitisation and cloud, bandwidth increases, security, new technology like low earth orbit (LEO) satellites and regionalisation and the edge.

In order to meet these markets, Russell said VNS has set up a five-year investment program coming close to $1 billion, which is built on the five key pillars of expanding its geographic network, upgrading network capacity, enhancing security credentials, utilising new technologies and enriching its product suite.

Russell said VNS’ ambitions of geographic network expansion include its $100 million sea cable contract for the Darwin-Jakarta-Singapore Cable, known as Project Highclere.

As part of that project, Vocus is to provide the final link of the cable, linking the Australia Singapore Cable (ASC) to the North West Cable System (NWCS) in Port Hedland, Western Australia.

This is expected to interconnect with the 4,600 kilometre ASC between Perth and Singapore and the 2,100 kilometre NWCS between Port Hedland and Darwin, with the completed system expected to be online by mid-2023. 

He also referred to Project Horizon – its plan to roll out a 2,000-kilometre high-capacity fibre connection from Perth to Port Hedland in Western Australia. 

In addition, Russell said Vocus has started planning and designing a cable system for the east coast of Australia following an increase in capacity enquiries, specifically a demand for long-term capacity and more redundancy.

“This new submarine cable system between Melbourne, Sydney and Brisbane would complement our existing coastal and inland fibre routes,” Russell said.

“While our network has proven to be incredibly resilient through bushfires and floods, this submarine system would respond to our customers’ growing desire for dark fibre, redundancy and resilience.

“The East Coast Cable System is being designed as a 1,600 kilometre system with as many as 24 fibre pairs – the highest subsea fibre count system we will have deployed.”

The second major focus of upgrade taps into Vocus’ existing work with the NT government through the joint Terabit Territory project, which will see Vocus deploy 200Gbps (Gigabits per second, per wavelength) technology on its domestic fibre network into Darwin. 

Other upgrades include upping the standard for its customers to 400 GB through its national fibre backbone, with 100 GB for regional routes.

“Our major regional routes will be upgraded by as much as 20 times their current capacity and augmented with new subsea routes,” Russell said.

“Our intercapital routes will be upgraded by as much as 5 times their current capacity. 

“Our metro fibre will be upgraded in all capital cities.”

For its forecasted security upgrade, Russell claimed Vocus has doubled its investment in security and anticipates it will be doubled again next year with the addition of new technology, software and employees.

“With the ‘Security of Critical Infrastructure’ and systems of national significance legislation recently making it through Parliament, we see security as a vital part of our business and a solid go-to-market opportunity as we add more products and services to our secure, segregated network,” he said.

Russell also talked up low earth orbit (LEO) satellite systems, heralding it as being “on the cusp of the most significant telecoms technology shift in decades.

“LEOs offer speed, latency and throughput comparable to fixed line and fixed wireless technologies,” he said.

“They will provide a generational leap in regional and remote connectivity and provide a new last-mile solution where trenching fibre is economically unviable.”

Vocus has already jumped on the LEO bandwagon, building 16 ground stations in Australia over the course of a year. In addition, Vocus New Zealand appeared to be in the spotlight last year to potentially build an earth station south of Whangārei, New Zealand, to support Elon Musk’s Starlink low earth orbit satellite broadband service. 

The last pillar for the investment program, product enrichment, sees Vocus progress from its work over the last three years of rationalising legacy networks, retiring old products and decommissioning old systems, to focus on connectivity, Russell said.

“Speed is everything and we’ve built a reputation for market leading delivery of new services using pre-provisioned capacity,” he claimed.

He also said that for products outside Vocus’ core offerings, the provider has refined its partner solution strategy.

“We’ll work with partners to deliver private 5G networks, LEO connectivity and cloud services,” he said.

Aside from Vocus’ investment plans, Russell also said the provider is looking at an internal separation of its retail business – which includes Dodo, iPrimus and Commander – in order to pursue a future sale or initial public offering (IPO).

At the end of his speech, Russell also pleaded to both major parties to not have “another narrow, short-term, unsustainable NBN [National Broadband Network] focused policy”.

Instead, he said he would prefer a policy that focuses on “sustainable competition, prioritises private infrastructure investment and embraces the deployment of new technologies which can uplift our country’s digital capability”.

“In the five federal elections since 2007, both major parties have presented different NBN policies and the government of the day has implemented their vision for the NBN,” he said.

“With the NBN rollout complete, the current government’s telecom policy has been focused on maximising the value of the investment. 

“This singular focus is in direct opposition to the historical direction in Australia of promoting private infrastructure investment.

“As a consequence, we now have a market where a government owned monopoly receives taxpayer funding to compete against alternative private infrastructure – and where competitive private operators are directly taxed to subsidise this monopoly.”

As a result, he claimed this has brought in “mission creep” into competitive markets throughout the existence of the NBN, but more so in recent years.

“NBN’s latest mission creep into third-party datacentre facilities, an existing competitive market, has a direct impact on how we at Vocus think about investing in new fibre,” he claimed.

“A government monopoly pushing into contestable markets can only have a negative impact on private infrastructure investment.“

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