1 00:00:04,019 --> 00:00:06,540 Sean Aylmer: Welcome to the Fear and Greed business interview. I'm Sean 2 00:00:06,570 --> 00:00:10,559 Sean Aylmer: Aylmer. The telco sector has certainly seen plenty of upheaval 3 00:00:10,559 --> 00:00:13,710 Sean Aylmer: over the past couple of months. The outage at Optus 4 00:00:13,950 --> 00:00:17,999 Sean Aylmer: really demonstrated just how much modern businesses rely on connectivity 5 00:00:18,270 --> 00:00:21,270 Sean Aylmer: for everything from phone systems to point of sale. If 6 00:00:21,270 --> 00:00:24,300 Sean Aylmer: anything, it suggests that we're even more reliant on our 7 00:00:24,300 --> 00:00:27,840 Sean Aylmer: telcos than you might expect. Even businesses that operate mostly 8 00:00:27,840 --> 00:00:32,009 Sean Aylmer: offline have been reminded of the importance of connectivity. So, 9 00:00:32,009 --> 00:00:35,129 Sean Aylmer: I'm sure recent weeks have seen plenty of businesses assessing 10 00:00:35,129 --> 00:00:38,520 Sean Aylmer: what they need and where to get it. Nick Pachos is the 11 00:00:38,520 --> 00:00:41,729 Sean Aylmer: Chief Commercial Officer at Superloop, which is a great supporter 12 00:00:41,729 --> 00:00:44,280 Sean Aylmer: of this podcast. Nick, welcome to Fear and Greed. 13 00:00:44,820 --> 00:00:45,600 Nick Pachos: Welcome, Sean. 14 00:00:46,260 --> 00:00:48,960 Sean Aylmer: So, let's start with the big picture. What's the state of 15 00:00:48,960 --> 00:00:52,559 Sean Aylmer: the sector right now? What has the Optus outage ... ? What's 16 00:00:52,619 --> 00:00:55,650 Sean Aylmer: the impact of that outage had on the sector? 17 00:00:56,670 --> 00:00:59,190 Nick Pachos: In terms of the status sector, we've seen an increased 18 00:00:59,250 --> 00:01:03,570 Nick Pachos: curiosity from new customers looking at our services, trying to 19 00:01:03,570 --> 00:01:06,509 Nick Pachos: understand a couple of things in relation to our services. 20 00:01:06,750 --> 00:01:10,109 Nick Pachos: Firstly, what are the products that we have available? How 21 00:01:10,109 --> 00:01:14,490 Nick Pachos: reliable those services are? And importantly, how much in control 22 00:01:14,490 --> 00:01:19,289 Nick Pachos: we are of the backbone network that helps deliver those 23 00:01:19,290 --> 00:01:23,790 Nick Pachos: services to our customers. And, as you mentioned, all businesses 24 00:01:23,849 --> 00:01:28,049 Nick Pachos: are highly reliant on the internet or connectivity. Gone are 25 00:01:28,049 --> 00:01:30,360 Nick Pachos: the days where the internet was a nice to have. 26 00:01:30,360 --> 00:01:34,170 Nick Pachos: It is now the backbone of most businesses that operate 27 00:01:34,170 --> 00:01:37,710 Nick Pachos: today. And, that goes anything from point- of- sale systems 28 00:01:37,890 --> 00:01:41,370 Nick Pachos: like you've mentioned, but cloud applications and most applications that 29 00:01:41,370 --> 00:01:44,309 Nick Pachos: are used. We're seeing our customers wanting to use those 30 00:01:44,309 --> 00:01:49,020 Nick Pachos: applications through traditional means like their computers and their networks at 31 00:01:49,020 --> 00:01:53,250 Nick Pachos: the offices, or indeed via their mobile devices. And, the 32 00:01:53,250 --> 00:01:57,540 Nick Pachos: ability to interact with those applications across the myriad of 33 00:01:57,540 --> 00:02:02,189 Nick Pachos: devices and being always available is more critical now than 34 00:02:02,190 --> 00:02:05,369 Nick Pachos: it ever has been. But, more top of mind for 35 00:02:05,369 --> 00:02:07,920 Nick Pachos: our customers than it ever has been in the case 36 00:02:07,920 --> 00:02:08,760 Nick Pachos: of recent events. 37 00:02:10,740 --> 00:02:14,760 Sean Aylmer: Okay. So, in Superloop's case, you are a little unusual in that you 38 00:02:14,760 --> 00:02:18,240 Sean Aylmer: actually have invested in your own fiber optic network. And, 39 00:02:18,240 --> 00:02:21,150 Sean Aylmer: I suppose this comes to your point about the backbone 40 00:02:21,240 --> 00:02:24,750 Sean Aylmer: or the infrastructure that you use. So, just explain that. 41 00:02:24,750 --> 00:02:29,280 Sean Aylmer: So, how much do you rely on the Nbn and Telstras of 42 00:02:29,280 --> 00:02:31,770 Sean Aylmer: the world? And, how much is it your own fiber 43 00:02:31,770 --> 00:02:32,549 Sean Aylmer: optic network? 44 00:02:33,389 --> 00:02:35,550 Nick Pachos: It's quite a complex beast. So a network's made up 45 00:02:35,550 --> 00:02:38,579 Nick Pachos: of many elements, but if we start from the Nbn, 46 00:02:38,580 --> 00:02:41,520 Nick Pachos: when a customer buys an Nbn service from the likes 47 00:02:41,520 --> 00:02:44,520 Nick Pachos: of Superloop, there is the last mile, which I like 48 00:02:44,520 --> 00:02:47,340 Nick Pachos: to call it, which is delivered by Nbn. And, that 49 00:02:47,340 --> 00:02:51,120 Nick Pachos: is pretty common regardless of the provider that the customer 50 00:02:51,120 --> 00:02:54,360 Nick Pachos: buys that from. That component is the same component that 51 00:02:54,360 --> 00:02:58,738 Nick Pachos: gets bought from any RSP in the market. But, what happens 52 00:02:58,740 --> 00:03:02,520 Nick Pachos: from the point where Nbn hand that service off, which 53 00:03:02,520 --> 00:03:08,070 Nick Pachos: are in 121 different places across Australia, how we connect 54 00:03:08,070 --> 00:03:13,080 Nick Pachos: that service into our network, how our systems, networks and 55 00:03:13,080 --> 00:03:17,220 Nick Pachos: processes interact with each other to ensure that that service 56 00:03:17,760 --> 00:03:21,750 Nick Pachos: a, gets nailed up, b, performs as it expected to 57 00:03:21,750 --> 00:03:26,010 Nick Pachos: perform as in the speed throughput. But, c, importantly, there's 58 00:03:26,010 --> 00:03:29,190 Nick Pachos: so many links that go into that delivering that service, 59 00:03:29,610 --> 00:03:32,669 Nick Pachos: how much resilience we have in the network and the 60 00:03:32,669 --> 00:03:36,029 Nick Pachos: components of the network that enable that service to keep 61 00:03:36,180 --> 00:03:39,300 Nick Pachos: running, even in the case that we have an outage 62 00:03:39,300 --> 00:03:43,620 Nick Pachos: on one particular link. And that is whether that link 63 00:03:43,650 --> 00:03:47,400 Nick Pachos: is a fiber service just going from our main data 64 00:03:47,400 --> 00:03:50,460 Nick Pachos: center connecting into the Nbn. It might be in the 65 00:03:50,460 --> 00:03:52,980 Nick Pachos: capital city, it might be a fiber service that runs 66 00:03:53,369 --> 00:03:56,790 Nick Pachos: from a regional point of interconnect into our network as 67 00:03:56,790 --> 00:04:01,710 Nick Pachos: well. Our ability to have multiple paths, multiple sets of 68 00:04:01,710 --> 00:04:06,060 Nick Pachos: fibers that connects it nationally. And then, importantly how that connects 69 00:04:06,090 --> 00:04:10,379 Nick Pachos: internationally. And at Superloop, we have our own international network, and 70 00:04:10,379 --> 00:04:14,370 Nick Pachos: in fact we own our own fiber optic cable. It sits deep 71 00:04:14,370 --> 00:04:17,850 Nick Pachos: in the water on the sea floor between Sydney, Perth 72 00:04:17,850 --> 00:04:21,240 Nick Pachos: and Singapore. And, all those are parts of our network, 73 00:04:21,540 --> 00:04:24,839 Nick Pachos: that allow us to branch out into multiple segments across 74 00:04:24,839 --> 00:04:29,280 Nick Pachos: the globe and deliver something as simple as a Google 75 00:04:29,309 --> 00:04:31,650 Nick Pachos: search result into your browser. 76 00:04:32,279 --> 00:04:35,279 Sean Aylmer: Okay. So, just for someone like me, and I am 77 00:04:35,279 --> 00:04:38,819 Sean Aylmer: following what you are saying, Nick, but what you're saying, there's lots 78 00:04:38,820 --> 00:04:42,569 Sean Aylmer: of inbuilt redundancies here. So, the idea is that you're 79 00:04:42,570 --> 00:04:48,269 Sean Aylmer: not just reliant on one specific set of infrastructure, there 80 00:04:48,270 --> 00:04:49,680 Sean Aylmer: are redundancies. Is that right? 81 00:04:50,310 --> 00:04:53,339 Nick Pachos: Correct. And, some of those redundancies may be our own 82 00:04:53,339 --> 00:04:56,580 Nick Pachos: fiber, or they may be services or products that we 83 00:04:56,820 --> 00:04:58,980 Nick Pachos: build over the top of that, because it's more than 84 00:04:58,980 --> 00:05:02,460 Nick Pachos: just the fiber itself. It's our systems or platforms that 85 00:05:02,460 --> 00:05:06,058 Nick Pachos: enable it to interconnect to multiple networks around the globe 86 00:05:06,059 --> 00:05:06,480 Nick Pachos: as well. 87 00:05:06,930 --> 00:05:08,490 Sean Aylmer: Stay with me, Nick. We'll be back in a minute. 88 00:05:14,760 --> 00:05:20,039 Sean Aylmer: I'm speaking to Nick Pachos, Chief Commercial Officer at Superloop. Okay. 89 00:05:20,040 --> 00:05:23,399 Sean Aylmer: So, Superloop as an organization, and I must say I've 90 00:05:23,400 --> 00:05:25,020 Sean Aylmer: been looking at your share price and you've been doing 91 00:05:25,020 --> 00:05:29,550 Sean Aylmer: pretty well, and your most recent results we're good. So, 92 00:05:29,790 --> 00:05:33,180 Sean Aylmer: I mean, it's a very tough industry to be in 93 00:05:33,420 --> 00:05:35,910 Sean Aylmer: as a telco. Right? Obviously you have a monster player 94 00:05:35,910 --> 00:05:38,670 Sean Aylmer: in Telstra, but you have plenty of other players in 95 00:05:38,670 --> 00:05:42,539 Sean Aylmer: it as well. What's the competitive advantage of Superloop? If 96 00:05:42,540 --> 00:05:45,750 Sean Aylmer: I'm listening to this and I'm thinking, " Why Superloop?", is 97 00:05:45,750 --> 00:05:47,820 Sean Aylmer: it just that redundancy factor? What is it? 98 00:05:48,450 --> 00:05:51,089 Nick Pachos: Not at all. I think that's one and certainly an 99 00:05:51,089 --> 00:05:53,490 Nick Pachos: important one, in that we control the network and we 100 00:05:53,490 --> 00:05:56,039 Nick Pachos: have our own network that we're in control of and our 101 00:05:56,040 --> 00:06:00,630 Nick Pachos: own fiber and associated systems. But, there's quite a large 102 00:06:00,630 --> 00:06:04,830 Nick Pachos: number of layers that form part of the service. Being 103 00:06:04,830 --> 00:06:08,730 Nick Pachos: a challenger allows us to differentiate. Okay? So, it allows us 104 00:06:08,730 --> 00:06:11,010 Nick Pachos: to do things a little bit differently to some of 105 00:06:11,010 --> 00:06:12,960 Nick Pachos: the bigger providers. It allows us to be a little 106 00:06:12,960 --> 00:06:16,889 Nick Pachos: more nimble. But, when you're looking at a business service, 107 00:06:16,889 --> 00:06:20,279 Nick Pachos: for example, you're looking for a provider that not only 108 00:06:20,279 --> 00:06:22,770 Nick Pachos: can offer you a service and do they have a 109 00:06:22,770 --> 00:06:26,070 Nick Pachos: product portfolio that meets your requirements? And, certainly at Superloop, 110 00:06:26,790 --> 00:06:28,740 Nick Pachos: we do a lot of work in ensuring our product 111 00:06:28,740 --> 00:06:32,580 Nick Pachos: portfolio doesn't just exist, but actually serves the needs of 112 00:06:32,580 --> 00:06:35,940 Nick Pachos: our customers and what they're looking for. And those, I 113 00:06:35,940 --> 00:06:39,150 Nick Pachos: guess, characteristics that the customers are looking for are probably 114 00:06:39,150 --> 00:06:41,400 Nick Pachos: changing over time. So we just make sure that our 115 00:06:41,400 --> 00:06:45,210 Nick Pachos: products are not only fit for purpose, but really do 116 00:06:45,210 --> 00:06:49,019 Nick Pachos: provide some differentiation in the market. And, it may be 117 00:06:49,020 --> 00:06:53,219 Nick Pachos: something as simple as giving you some extra speed for 118 00:06:53,219 --> 00:06:55,260 Nick Pachos: a couple of days, because you might have a big 119 00:06:55,260 --> 00:06:58,020 Nick Pachos: project that's running and therefore you can turn that down. 120 00:06:58,380 --> 00:07:02,160 Nick Pachos: So, that's one element of it. How do you transition 121 00:07:02,190 --> 00:07:06,060 Nick Pachos: to another provider? So, when someone signs up to Superloop, 122 00:07:06,089 --> 00:07:10,170 Nick Pachos: as they would many other retail service providers, we put 123 00:07:10,170 --> 00:07:12,480 Nick Pachos: a lot of effort in making sure that that transition is 124 00:07:12,570 --> 00:07:16,860 Nick Pachos: smooth. We have a dedicated business center in Adelaide that 125 00:07:16,860 --> 00:07:19,770 Nick Pachos: helps our customers do that transition. And, that's one thing 126 00:07:19,770 --> 00:07:23,519 Nick Pachos: that we do see. Our customers are extremely nervous when 127 00:07:23,520 --> 00:07:27,210 Nick Pachos: they're looking for providers to ensure that they can transition 128 00:07:27,210 --> 00:07:29,609 Nick Pachos: from one provider to another, because they've got a product 129 00:07:29,609 --> 00:07:33,390 Nick Pachos: that they're after, but importantly have that support available at 130 00:07:33,390 --> 00:07:36,450 Nick Pachos: the time that they need it, to make that transition 131 00:07:36,540 --> 00:07:39,420 Nick Pachos: as smooth as possible and not interrupt their day- to- 132 00:07:39,420 --> 00:07:40,169 Nick Pachos: day business. 133 00:07:40,889 --> 00:07:42,839 Sean Aylmer: So, do you think as we go forward, we're going 134 00:07:42,840 --> 00:07:45,929 Sean Aylmer: to end up in the telco space, a couple of 135 00:07:45,929 --> 00:07:49,500 Sean Aylmer: really big players and then smaller players who are just 136 00:07:49,500 --> 00:07:54,600 Sean Aylmer: nimble, who are able to provide services for certain segments 137 00:07:54,600 --> 00:07:56,280 Sean Aylmer: of the economy. Do you think that's how it is? 138 00:07:56,280 --> 00:07:58,440 Sean Aylmer: Or, are we going to end up with a bunch 139 00:07:58,590 --> 00:08:03,179 Sean Aylmer: of providers who offer all services for everyone? Where do 140 00:08:03,179 --> 00:08:03,930 Sean Aylmer: you think we're going? 141 00:08:04,799 --> 00:08:07,260 Nick Pachos: We do already have in the market a number of 142 00:08:07,260 --> 00:08:11,489 Nick Pachos: large retail service providers that have gone and acquired a 143 00:08:11,490 --> 00:08:14,070 Nick Pachos: number of big brands across the market. So, we've got 144 00:08:14,070 --> 00:08:17,339 Nick Pachos: those big guys, if you like, already. At the other 145 00:08:17,340 --> 00:08:19,590 Nick Pachos: end of the spectrum, there is a very, very long 146 00:08:19,590 --> 00:08:23,400 Nick Pachos: tail of smaller providers as well, who do those niches 147 00:08:23,400 --> 00:08:26,130 Nick Pachos: and it might be just that they're very cheap, but 148 00:08:26,130 --> 00:08:29,220 Nick Pachos: also maybe have less control over their network, or not 149 00:08:29,220 --> 00:08:33,480 Nick Pachos: really deploying or investing in networks to enable them, but 150 00:08:33,480 --> 00:08:38,040 Nick Pachos: certainly offer niche products to certain segments. And then there's 151 00:08:38,309 --> 00:08:41,339 Nick Pachos: this mid range ... And, we sit up the top end 152 00:08:41,340 --> 00:08:43,228 Nick Pachos: of town, I guess not quite as big as the big 153 00:08:43,230 --> 00:08:45,870 Nick Pachos: guys, but you would've seen, as you mentioned, our growth 154 00:08:45,870 --> 00:08:48,569 Nick Pachos: over the last few years, where we're seeing a niche 155 00:08:48,570 --> 00:08:51,870 Nick Pachos: where there are people that need ... They need a retail 156 00:08:51,870 --> 00:08:56,250 Nick Pachos: service provider that is big, that de- risks their organizations, 157 00:08:56,580 --> 00:09:00,870 Nick Pachos: but also has the ability to be nimble enough to 158 00:09:00,870 --> 00:09:03,660 Nick Pachos: service their ever- changing requirements. And, I think we fit 159 00:09:03,660 --> 00:09:06,660 Nick Pachos: that spot pretty well. Do I think we're going to 160 00:09:06,660 --> 00:09:11,460 Nick Pachos: end up with more larger ones? I guess, we're sitting 161 00:09:11,460 --> 00:09:14,399 Nick Pachos: at number five- ish at the moment. So, we are 162 00:09:14,400 --> 00:09:17,159 Nick Pachos: larger, but there still is a big air gap between 163 00:09:17,160 --> 00:09:20,218 Nick Pachos: us and the very large ones. But, we're seeing an 164 00:09:20,280 --> 00:09:26,819 Nick Pachos: increased momentum in customers coming to the smaller RSPs. And, 165 00:09:27,059 --> 00:09:30,540 Nick Pachos: as we look at the market and other parallel markets, 166 00:09:30,929 --> 00:09:33,359 Nick Pachos: we've still got some way to go, because the challenges 167 00:09:33,360 --> 00:09:38,130 Nick Pachos: make up a relatively small part of the overall telecommunications 168 00:09:38,130 --> 00:09:41,070 Nick Pachos: market today. But, as we look at the energy sector 169 00:09:41,070 --> 00:09:44,760 Nick Pachos: and other sectors, we see that the challenges make a 170 00:09:44,760 --> 00:09:48,840 Nick Pachos: larger proportion, in the order of 30% of the overall 171 00:09:48,840 --> 00:09:52,590 Nick Pachos: market structure of that particular given market. And, in Australia, 172 00:09:52,590 --> 00:09:55,679 Nick Pachos: we're still not there yet. So, I expect that the 173 00:09:55,679 --> 00:09:59,250 Nick Pachos: challenger market that we form part of and hopefully lead, 174 00:09:59,760 --> 00:10:02,488 Nick Pachos: we are already seeing data points that are showing that 175 00:10:02,490 --> 00:10:05,700 Nick Pachos: that segment of the market is increasing. And, we're certainly well- 176 00:10:05,700 --> 00:10:10,320 Nick Pachos: positioned and actually taking our disproportionate share of that market today. 177 00:10:10,679 --> 00:10:13,920 Sean Aylmer: And, I presume things like what happened at Optus, but 178 00:10:13,920 --> 00:10:15,450 Sean Aylmer: for the grace of God go a lot of telco 179 00:10:15,450 --> 00:10:18,208 Sean Aylmer: providers, so I'm not being critical of Optus in this 180 00:10:18,210 --> 00:10:23,219 Sean Aylmer: instance ... It does make businesses, though, think about their telecommunication 181 00:10:23,219 --> 00:10:27,809 Sean Aylmer: services, their retail service providers, their RSPs, and whether they're happy 182 00:10:27,809 --> 00:10:29,458 Sean Aylmer: or not with them, which is probably a good thing 183 00:10:29,458 --> 00:10:31,500 Sean Aylmer: for business to be checking in every year or so. 184 00:10:32,220 --> 00:10:34,260 Nick Pachos: Yeah. And, I think it's always a good time to 185 00:10:34,260 --> 00:10:35,880 Nick Pachos: take a check of what you've got and what you've 186 00:10:35,880 --> 00:10:40,170 Nick Pachos: been running for a long time. And importantly, understand how 187 00:10:40,170 --> 00:10:42,509 Nick Pachos: important it is to your business, because it changes. And, 188 00:10:42,780 --> 00:10:46,529 Nick Pachos: we saw in the instance where people like a hairdresser 189 00:10:46,529 --> 00:10:49,140 Nick Pachos: or a barber or whatever it may be, are heavily 190 00:10:49,140 --> 00:10:53,490 Nick Pachos: reliant on a telecommunication service. Yet, I think if you 191 00:10:53,490 --> 00:10:57,510 Nick Pachos: spoke to proprietors those businesses, they probably didn't realize at 192 00:10:57,510 --> 00:11:00,540 Nick Pachos: the time how reliant they were. They thought about it 193 00:11:00,540 --> 00:11:03,719 Nick Pachos: in the context of an EFTPOS machine or tap- and- 194 00:11:03,719 --> 00:11:05,850 Nick Pachos: go or whatever you want to call it, not really 195 00:11:05,850 --> 00:11:10,350 Nick Pachos: understanding that underneath all that is a telecommunication services that 196 00:11:10,350 --> 00:11:11,760 Nick Pachos: is enabling that. 197 00:11:12,120 --> 00:11:13,950 Sean Aylmer: Nick, thank you for talking to Fear and Greed. 198 00:11:14,250 --> 00:11:15,030 Nick Pachos: Thanks very much. 199 00:11:15,510 --> 00:11:18,959 Sean Aylmer: That was Nick Pachos, Chief Commercial Officer at Superloop, which 200 00:11:18,960 --> 00:11:21,149 Sean Aylmer: is a great supporter of this podcast. This is the 201 00:11:21,150 --> 00:11:23,909 Sean Aylmer: Fear and Greed business interview. Join us every morning for 202 00:11:23,910 --> 00:11:26,370 Sean Aylmer: the full episode of Fear and Greed, Australia's best business 203 00:11:26,370 --> 00:11:28,740 Sean Aylmer: podcast. I'm Sean Aylmer. Enjoy your day.