Vocus' next target: Telstra and Optus' customers

It's been likened to a David and Goliath battle - two small ISPs fighting tooth and nail to fend off attacks by TPG's Goliath in an effort to create a new company that would significantly shake up the Australian telco market.

James Spenceley

Vocus and Amcom were prepared to do whatever it took to get the merger through to completion.

It wasn't an easy road. TPG slowly and incrementally increased its share in Amcom to a 19.9 percent blocking stake - enough to scuttle the merger.

On paper, TPG had the winning hand, and for a while it looked as though the move would be successful.

But luckily for the pair, TPG's aggressive approach didn't sit well with Amcom shareholders.

They retaliated when backed into a corner and, in a never-before-seen result, turned up in droves to support the merger.

Now, Australia has a new telco worth a combined $1.2 billion and boasting an impressive horde of assets.

TPG won't have long to lick its wounds, though - according to Vocus CEO James Spenceley, the company's next target is scooping up the customers of Australia's top providers of business internet services.

Line of sight

Excluding Telstra and Optus, for a long time AAPT was the gold standard of corporate telecommunications in Australia.

Macquarie Telecom stuck its head above the rest for a number of years, and TPG is popular among the mid-market despite its strong retail focus.

But according to Spenceley, there's no current provider that stands out as number one.

It's a spot Vocus is gunning for.

"We want to become the default choice for corporate telecommunications in Australia. At the moment, I don't think there is one," he said.

"Telstra and Optus are the guys that have all the business. We just need to steal it from them."

The Amcom merger creates a telco with around 7400km of fibre and more than 20 data centres across Australia and New Zealand. 

However, infrastructure fire power is not the issue - the problem Spenceley faces is that Vocus is not a household name.

But from his point of view, it's not a challenge, it's an opportunity: a honeypot.

"They've got massive black books. They've got a lot that's strong about their business, but we are smaller and more nimble."

He's planning to embark on a brand awareness campaign to bring more attention to Vocus.

It started with a cheeky dig at TPG in newspapers and news sites and now includes a new website.

"People may not have heard of us, but as soon as they look around, they see we've got the credibility," he said.

"You find out all of these household names - tv channels, sporting shows - depend on us and travel across our fibre optic network.

"People get very comfortable very quickly with us. It's just about increasing our brand awareness. You'll see us do a lot more marketing now to get that out there." 

Will it work?

Telco analyst Paul Budde thinks Vocus' infrastructure will be its winning hand.