Amcom cautious of NBN role for fibre assets

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Amcom cautious of NBN role for fibre assets

Amcom Telecom has held “very preliminary discussions” with Senator Conroy’s department around the NBN but is seeking further clarification before committing to vend in some of its dark fibre assets.

The service provider's chief executive, Clive Stein, said discussions with the Department of Broadband, Communications and the Digital Economy (DBCDE) centred on "ensuring the Government is fully up-to-speed with our assets".

These assets include some 1072 km of fibre in Perth, Adelaide and Darwin.

But Stein is cautious not to commit to an asset-for-equity exchange in the NBN too early in the process.

"We're looking at the NBN space with interest but at this stage there isn't much clarity as to what the commercial arrangements would be," Stein said.

"We have what we'd call strategic assets, but we need more understanding of the Government's needs to work out how we'd progress. There's interest but we need to know more."

Amcom, which has been deploying fibre for a decade, said the NBN was a "mammoth" task.

"We think the Government has a lot to work out," Stein said.

Although the telco continues to focus on fibre networks for "high net worth corporates", it also has a consumer division providing DSL services to some 17,000 customers.

Stein said Amcom had no plans to increase its DSLAM footprint. The decision was in no way related to the NBN or potential for that investment to become stranded assets, he said.

On the corporate side of the business, Amcom has around 600 customers. About 45 per cent are blue-chip corporations, a third are government agencies and the remaining customers are other telcos buying wholesale capacity.

Stein was in Sydney for a summit of small market capitalisation firms seeking a broader audience of potential investors.

He said Amcom had proven its business model with a diverse customer base, strong recurring revenues and that it was "in the right place, at the right time with the right assets".

"Business demand for fibre-based services is growing year-on-year," he said.

Stein said the Perth market had proven "incredibly resilient" in a tough market environment, with Amcom continuing to attract new customers.

He was also hopeful that procurement reforms in the Northern Territory could significantly increase business opportunities there.

"We've already got a reasonable footprint and the Government in Darwin is our biggest customer," Stein said.

"The [Territory] Government has previously looked more to the major incumbents as providers, so the reforms could make us more relevant and increase opportunities in the market."

Stein said he also believed Amcom's 22 per cent stake in iiNet could be attractive to investors.

"We're trying purely to expose potential investors to a stock that's reasonably undervalued," Stein said.

"We have a longstanding track record as a business but we need to gain more [investment] exposure."

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