Uniti Group backs superiority of fibre-to-the-premises

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Uniti Group backs superiority of fibre-to-the-premises

'And NBN Co acknowledges this'.

Uniti Group, home to Opticomm and the former Telstra-owned Velocity network, said it had been right to back fibre-to-the-premises infrastructure, with its own fibre footprint capable of higher line speeds than the NBN.

Group managing director and CEO Michael Simmons told the company’s FY21 results briefing that fibre is the “right market” to play in, as evidenced by NBN Co’s current direction in upgrading part of its own network.

“Fibre has consistently, over the past five years, provided the best returns to shareholders,” Simmons said.

“This is due to the nature of fibre. It is near infinite in speed capability, with low maintenance CapEx to keep up with speed demands. 

“It is not shared bandwidth -it is dedicated to the premises. It is not finite in capacity, it is not contended, and when it is exclusive to the premises, the returns become very exciting.”

Simmons noted that “there are advantages to not being the National Broadband Network” while still pursuing a fibre-to-the-home strategy.

“We choose where we build, and we can expand products and services, technology, markets as well as retail and wholesale on our core infrastructure,” he said.

Simmons said that Uniti had a higher proportion of users on “up to 100Mbps-plus” plans than NBN Co, and that possible line speeds across the Uniti network were consistently higher than on NBN infrastructure.

He added that NBN Co now “acknowledges” the superiority of fibre “and is well advanced in replacing its fibre-to-the-node with fibre-to-the-premises.” 

Uniti Group reported revenue of $159.9 million, up 175 percent on the previous year, with earnings before interest, taxation, depreciation and amortisation (EBITDA) of $73.6 million and a reported net profit after tax (NPAT) of $29.2 million.

Simmons noted that the company is unlikely to acquire further businesses, as it has done in the past, though it would be open to buying up assets as it did with the Velocity network from Telstra.

“We’re not ruling out asset acquisitions like another ‘Velocity’, for example, that fits nicely into that core infrastructure, but stepping outside of our core business today into another vertical is highly unlikely from an M&A perspective,” he said.

Simmons said the company is interested in spaces that require fibre infrastructure to operate, such as edge computing, and is weighing up potential points of entry.

“In terms of leveraging the existing infrastructure by stepping into some markets that can leverage that infrastructure, such as edge compute and storage, we see that as an interesting market,” he said.

“Whether that’s done in partnership with businesses that are natural players in that space such as your bigger data centre operators, or even the midmarket data centre operators [that] are doing it independently, is something we would still like to evaluate.”

Simmons said it was now time for Uniti “to deliver” with the assets and brands that now come under its roof.

He was buoyant at the company’s prospects, and acknowledged that it could put Uniti on the radar of larger players looking to acquire assets themselves.

“We would be naive not to expect that someone would be looking at us,” he said.

“We’re playing in the right market in terms of the fibre and cable market. 

“Globally these businesses are in high demand and we are generating very good returns for shareholders.”

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