With just a week to go before Vox Telecom terminates its listing on the JSE, founder and CEO Doug Reed wants to return the company to its “entrepreneurial roots”, away from the public glare that comes with being a listed company.
“Going private allows Doug to be a lot more himself again,” says MacRobert. “His strength is starting businesses. He’s very entrepreneurial and understands leverage opportunities in a highly arbitraged industry.”
He says Vox plans to launch new businesses and may also consider acquisitions.
“We’re going back to the days when we were shareholders and to the days where we ate, breathed and slept this business,” Reed adds.
He says that although there will be no changes in corporate governance at the company after it leaves the JSE, he is looking forward to running it “more like a private company”. This, he adds, will allow it to make “long-term decisions without worrying about short-term pressures from delivering earnings growth to shareholders every six months”.
Vox has had a troubled few years, not least because of its exposure through subsidiary Vox Orion to the least-cost routing (LCR) market – where companies have historically taken advantage of arbitration opportunities from high mobile termination rates, the fees operators charge each other to carry calls onto their networks. Concerns by analysts and investors about the company’s exposure to LCR as termination rates come down have had the effect of depressing Vox’s share price.
In the past year, Vox has taken an impairment charge of about R750m, mostly related to the writing down of goodwill associated with its acquisition of the Orion business. Reed says Vox Orion is making good progress in converting its LCR customers to Vox’s own telecommunications network and makes no bones about the fact that he thinks stock market analysts don’t fully understand the fundamentals of the business.
MacRobert, who has already begun work at Vox – his official starting date is 1 December – says he’s joining the company because he’s known Reed and his team at Vox for years and thinks there is a strong platform on which new products and services can be created.
MacRobert is credited with growing Internet Solutions from a 300-person operation in 2001 to 1 300 people when he left seven years later, in 2008.
“Vox is a well-run business that has just had some bad luck in the last few years,” MacRobert says. “We want to move under the radar for a while, while we build out the new strategy. We understand the business can’t stay exactly like it is today, but we will look at add-ins and not take-outs to what’s already there.”
Reed adds that Vox’s core network, which has been upgraded significantly with new points of presence around the country and more fibre-optic links using metro Ethernet technology, will form the basis of the product and service categories the company chooses to go after.
One of those areas is likely to be mobile broadband and later mobile voice services. Cloud computing is another area of big focus and one that Reed hopes will drive more traffic across Vox’s core network.
The company’s new technology allows it to “tailor make services for market segments and provide free or cheaper services at different times”, Reed says. “There’s a whole variety of things we couldn’t do before, which will give us a lot of advantages in terms of new product development next year.” — Duncan McLeod, TechCentral
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