It seems that the struggle for FlowCom is finally over.
The company has struggled from the very start. This was partly due to the fact that it entered the market towards the end of the telco boom, at a time when it was becoming clear that infrastructure competition, as well as resale competition in the traditional telco markets, was killing off almost every company operating in that segment – as a vertically-integrated facilities-based telecommunications group, the company is far too small to compete with the likes of Telstra, Optus, AAPT and Primus, and it has been unable to grow the business to a sufficient mass to compete with them.
As a vertically-integrated business FlowCom lacked the agility to operate as a niche market player, a role which would have better suited a company of its size.
In the very beginning, the company bought an interesting asset in ‘Macrocom’. An East Coast infrastructure operator in the microwave space, this network has some interesting links into regional areas. However, despite its competitive nature, this wasn’t enough to achieve success – and, of course, the trend in this market is now clearly towards fibre-based networks.
In late January 2004, the company ended up in the hands of the receivers, just two months after it raised $5 million in a share placement to purchase the collapsed Froggy Internet business, along with its claimed 31,000 subscribers. This clearly demonstrated that the company was prepared to fight to the very end to maintain its operations, and the management was certainly not happy with the final decision to put it into receivership.
While I was in Wagga Wagga I read a long article on the collapse of FlowCom in the local newspaper. This highlights the regional nature of the company’s business – in fact, they were the operators of the Riverina Telco in which Wagga Wagga Council has an interest.
Let’s hope its new owners will take advantage of the good work that FlowCom has done during the past few years. The company certainly has potential, but in its current format it will need a significantly larger base from which to operate. Alternatively, it could be trimmed down to become a specialised (regional) player in the market – but the first option makes the most sense to me.
Australia – Telecommunications Infrastructure Inter-City Networks
Australia – Analysis telco market – Forecasting Developments
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