Disclaimer: All information on this section is of a general nature.
Before making any investment decision, you should consult your adviser.
Commentary on VONEX from State One’s Chairman Alan Hill
By the end of 2020 it is expected that the NBN will have been made available to at least 11.2 million Australian
consumers, with 8 m of these forecast to be active by then. Australian internet consumers will be compelled to dispose
of their old-style copper internet service and replace it with the fibre-based, Federal Government driven, National
Broadband Network. In making the transition, consumers will have the option as to which provider they select.
Obviously, many will opt to remain with Telstra, as the dominant carrier. Many will also select other options which they
deem to be more innovative or offering better value or service. There is no doubt that VONEX is already carving out
a niche for itself in this market, with a proven ability to attract clients from Telstra. Although the numbers are still
relatively small, we understand that nearly 100% of VONEX’s new clients are sourced directly from Telstra. Most
importantly, there is still a very large part of the national pie still to be converted to the NBN, and hence available to
VONEX. Once VONEX is listed on ASX (expected 12 June 2018), with an appropriate financial structure in place, we
expect that it will take just 9 – 12 months for VONEX’s cash generating power to become evident. Our confidence in this
regard is based upon:
✓ The forced “churn” evident in the national
broadband market – whereby consumers are
forced to drop their copper-based connection to
the existing internet communication to an
alternative provider;
✓ VONEX having positioned itself in the market sweet
spot - the small & medium sized enterprises sector,
where prices are best & demand growth is
strongest, while many competing companies are
not well equipped to face the host of technical
barriers; and
✓ VONEX developing relationships with other
industry participants, including companies like In A
Box (ASX:IAB) via VN8’s wholesale white labelling
business.