2015 Wrap

After a year that is a blur of travel, time in the office, too many spreadsheets, wins, losses, and market changes, it is time for my last post for 2015.2016

So, what’s happened this year?

The market

Big companies bought other companies, and a few merged. In general, the market continued to consolidate, with Vocus the big mover as it merged with M2 after M2 had just acquired CallPlus.

2degrees finally bought Snap to get into the broadband game, and in Australia TPG bought iiNet.

It was a crazy year where a whole bunch of brands disappeared and pecking orders were shaken up.

DTS

We didn’t buy anyone this year, we did that last December, and have spent this whole year fixing up the things we didn’t like about the company we acquired, which to be honest was a hell of a job that we learned a lot from. When we make our next purchase we will be far more aware of the costs and frustrations transition brings.

We experienced a surge in client numbers, averaging 30 new UFB connections p/month (and obviously a lot more of the other types of services we sell) and finish the year with 130 orders signed but pending provisioning. And, while those numbers are good, the margin per sale has continued to drop, meaning that while we have gained scale, profitability is not growing in the same fashion.

In 2016 we need to find ways to provide more services to clients, further differentiate our services, and drive further growth in Australia. On that note, Australian growth has been a shining light in the second half of this year with DTS having secured business in that 6 month period that will be worth $2.7M over 3 years. I hope to be able to announce one of the significant deals we secured early in 2016.

With margin on services we sell dropping to new lows, we have further reduced our bottom line result (with a view towards the long term) by rolling out a new client portal, a new softswitch, migrating all clients to both of those, moving all clients off prepay arrangements, and adding 15 or so new UFB POP’s to our network.

What sucked this year?

  • Enable provisioning delays
  • Chorus MDU installs
  • Losing some Government business to One.Govt

What didn’t suck this year?

  • New CRT (inter-region backhaul) costs from Chorus dropping massively, triggering a market-wide price drop that puts more ISP’s in a position to have a high capacity redundant links across New Zealand
  • We have significantly grown our market share in Canterbury through working with Enable and EAN
  • DTS voice sales have grown dramatically, with call minutes set to hit 1,000,000 p/month in early 2016

What’s happening next year?

In March 2016 we will also be setting up our next Australian POP, this time in Brisbane, which will increase our footprint on that side of the Tasman, giving us geographically diverse exit points to the rest of the world, and protected inter-capital transit between Queensland and NSW.

We are also going to ramp up our focus on network management (routers, firewalls, switches, WiFi), but more on that in coming months.

Thanks

To all our channel partners who helped us grow so much this year, you guys are all critical to our success and we appreciate all the work you bring us.

Our hard working and tireless staff, you guys are the reason we keep getting referrals. Thanks for the extra hours you put in, and the great results you get.

And most importantly, thanks to our customers. We are working hard to continually improve your experience with us, and our high retention rates would suggest you are noticing that. In 2016 I aim to make you even happier with your DTS services and price points.

That’s it, I am off for 2015, have a great Christmas.

Brendan Ritchie

 

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