Vocus : Ellie Sweeney, Vocus Chief Operating Officer, speaks at CommsDay 2021 Summit

CommsDay Summit 2021

Ellie Sweeney

4 May 2021

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Thank you so much for that kind introduction. At Vocus we are very proud to continue our association with the CommsDay Summit as Diamond Sponsor, and I am absolutely delighted to be here again today.

Here again, because I had the same spot 6 months ago at the Comms Day Summit and it would be an understatement to say it was an almost dystopian environment here, in the ball room, of the Fullerton Hotel.

Extreme social distancing, a sparsely filled room, little to no audience reaction to the speeches, "1984-esque" large screen video messages and most memorably for me, almost being slow clapped up to the dais… And outside of a couple of loyal Vocus colleagues, the claps and the music I think finished before I got to the lectern.

"There are decades where nothing happens and weeks where decades happen." When I reflect on that quote and the last 52 weeks it does feel like this industry has moved in ways, I don't think anyone would or could have foretold.

We have pivoted, accelerated, digitised, adapted, collaborated and in some respects read the mood of the zeitgeist.

Last time Vocus gave this address we spoke about:

1. How Covid is accelerating trends, and that we thought they were favouring Challengers like Vocus.
2. The Major events of 2020 - both the bushfires and Covid reinforced the criticality of Telco to the Australian and global economy.
3. How fibre Infrastructure is changing the shape of regional Australia, and Australia's role in the Indo-Pacific region.

We have all been rightly taught to talk in threes. Today, 6 months on, the three areas I'd like to cover are:

One, I'll talk about how Vocus' three-year turnaround is now complete, and how Vocus is now moving into a new stage of investment.

Two, I'd like to update you on Vocus's network investment vision- including a major program of work which we've commenced to complete our already extensive national network.

And Three, I like to talk about how we're addressing the two major issues facing network operators today - the security and sovereignty of our critical infrastructure assets.

So… with that long introduction, I'd like start by discussing just some of the proof points supporting Vocus' three-year turnaround completion, and how we're now in a new stage of exciting investment.

To provide some colour, allow me to paint a picture. I started with Vocus around 2 years ago. When I turned up on the first day, my MAML boss had fallen off his bike the day before, I didn't see him for a month and then 2 weeks later we started to entertain 2 well publicized acquisition offers.

Due Diligence in 2019 for me, 6 weeks into a new job, new company, having not lived in Australia for 4 years was to put it mildly………uncomfortable.

Fast forward to 2021. You may have seen in the news that Vocus has entered a Scheme Implementation Deed, under which an entity owned by a Consortium (comprising Macquarie Infrastructure and Real Assets, or MIRA and Aware Super) has agreed to acquire Vocus for $5.50 per share, resulting in an enterprise value of $4.6 billion.

What a difference 2 years can make. Gone was the extremely uncomfortable experience from 2 years prior, of talking about what we were going to do, to demonstrating what we have actually achieved and why we were comfortable to make the bold claim that the Vocus 3 year turn around was complete.

So, what has Vocus achieved?

At our last half-year results we announced:

• Strong momentum in Vocus Network Services, with: o 8% EBITDA growth
  o We are winning larger customers with larger contract values o In Wholesale, our total contract values are up by +41%
  o And we delivered for our first Low Earth Orbit Satellite customers
• We returned our Consumer segment to growth
• We delivered consistent growth in New Zealand
• We also made significant operational improvements:

• • 25% reduction in on net delivery times
  • 21% reduction in inbound calls
  • Lifted our delivery NPS to an average of +49
• We've simplified and consolidated our infrastructure and operations:
• • Taken $20m out of our cost base

• • Shut down legacy networks, BSS and DSLAMs
  • Significantly rationalised and consolidated backhaul
  • Uplifted our security posture
  • Remediated our CMDB
  • Implemented a highly scalable and consolidated core network
• All of this while we transform our business:
• • Launched over 50+ New products
  • New Contact Centre Platforms
  • New CX Tools
  • New CRM
  • Upgraded our Billing Platform
  • Improved our customers' digital experience
  • Launched our "One Platform" for our Dodo Customers, with other brands to follow.

You get the picture. I could go on… There is more to do, but we have moved faster than any of us expected.

When I came on board as COO in the early days of the turnaround, we were operating a number of legacy core networks, edge networks, and OSS/BSS platforms, all of which required highly manual processes to operate.

We've spent the past two years delivering what we call our 'Future State' network. This fundamentally changes the customer experience through simplifying, modernising and consolidating our network and the solutions we offer.

We are transforming the way our customers interact with us. Today it can be very human-centric, and while this will remain as an option, we now give customers the choice of self-serving digitally via a richer portal, a better web experience and APIs.

We recognise that to be the best in market, we must be a leader in great customer experience. For customers, the experience improves dramatically by increasing the control they have over their environment such as service qualification in real-time,real-time bandwidth changes, managing their networks, viewing bills, raising and tracking trouble tickets, and many other functions with no wait period.

Importantly, we are increasing our ability to scale. It will allow us to innovate, add new products and features quickly and seamlessly, including those delivered by our Partners. An example of one of these products is ENNI which will be launched to market over the coming weeks. ENNI will offer our domestic and international customers seamless and instant access to Vocus' advanced Ethernet services portfolio as an extension of their own network using the latest technology, living up to our brand promise of 'brilliant simplicity'.

Throughout the turnaround stage, we've been clear about the market opportunity for Vocus as Australia's specialist fibre and network solutions provider.

We believe we are strongly positioned to capitalise on accelerating market trends.

• The first trend is digitisation and cloud driving capacity demand.
• The second trend is demand for highly secure networks, especially in Government.
• The third trend is customer demand for speed and agility in service delivery

We remain committed to our vision to be "the challenger our customers deserve, and our people are proud of everyday", and we've been bringing that vision to life over the past three years. As I've said before, our vision is our north star and it informs every decision we make. It is personal working at Vocus.

We are purposeful about where we play, what is core to our business, where we make money, and what differentiates us in this market. We are not distracted by trying to be a mobile player, a media player, or a full-service provider.

At our core we are a fibre company, with great assets, great people, and a challenger mindset.

We are clear on the segments we should pursue to align with our core business as a specialist fibre and network solutions provider. Government, Media, Health, Aged Care, Resources, OTT, Global Service Providers, MSPs, Carriers, Hyperscalers, Space and Satellite.

And today the success of that customer-focus is reflected in our results.

Fibre is the critical infrastructure of the modern economy, and as we enter this new investment stage, support from MIRA and Aware Super will provide the strongest possible foundation for the business and our capacity to invest in our key assets.

2nd Point

Which provides the perfect segue to my second point: with Vocus now out of the turnaround stage, I want to share a vision of how Vocus will invest to expand our already extensive network infrastructure.

Today we operate:

• More than 15,000 kilometres of high-capacity terrestrial fibre between all mainland capitals and regional centres.
• The 4,600-kilometre,60-plus Terabit Australia Singapore Cable from Perth to Singapore via Christmas Island and Jakarta, Indonesia.
• The 2,000-kilometre, 12 Terabit North-West Cable System connecting offshore oil and gas facilities between Darwin and Port Hedland.

And this established, secure network is more than capable of meeting capacity demand well into the future.

Our national network can provide upwards of 50 times the capacity we have provisioned today at economic levels of incremental investment.

And as technology improves, we expect to be able to expand beyond this.

We are already upgrading our Sydney-Melbourne-Adelaide intercapital direct routes to deliver 4 times more capacity.

We are already upgrading our Sydney-Brisbane routes connecting regional centres to deliver 20 times more capacity.

We are in the final commissioning stages of upgrading our Adelaide-Darwin-Brisbane route to offer a massive 25 times increase in capacity.

These major upgrade programs will enable us to offer 400-Gig services on key routes next financial year.

On top of these projects which are already underway, our extensive regional network is capable of providing thousands of new on-ramps in regional areas, when and where our customers require it.

We have 144 datacentres connected, making Vocus amongst the most connected fibre operators in Australia.

And we have detailed plans in place to expand the reach of this network.

If you look at Vocus' national fibre network map today you'll see that we already connect every mainland capital, with rings to provide redundancy.

The only 'missing link' in these rings is in Western Australia between Port Hedland, where our North West Cable System from Darwin lands, and Geraldton, where our terrestrial network ends.

I am pleased to say that just last week, Vocus' Board gave the green light to commence work to close this final gap and complete our national fibre network.

We call this 'Project Horizon'.

The first stage of this program of work is now underway.

Project Horizon has been part of our long-term network extension plans for several years, and the high-level design work has already been completed.

Tenders for construction and optical systems will be issued over the coming months.

Once those tenders have been concluded and required permits have been secured, we start digging red dirt and laying fibre.