Entering Telecommunications — Case Studies

Southern Cross Electrical Engineering

• Southern Cross Electrical Engineering (SCEE) entered the telecom space in June 2016 through their A$17.2 million acquisition of Datatel Communications.

• Australian-based SCEE primarily provided electrical engineering services and communications technology solutions before the acquisition. Similarly, Datatel primarily focused on electrical and communications contracting in the commercial, industrial, health, and education sectors; Datatel had relationships with contractors working with the Australian National Broadband Network.

• After the acquisition, one of the key market sectors SCEE has expanded its operations into is Telecommunications and Data Centers. Within that sector, SCEE provides surveys, civil works, fiber optics, copper lines, power, and integration services.

• One metric of SCEE’s success in the telecom market is their provision of many of the above services for Australia’s leading carriers (e.g., NBN Co, Telstra, Optus, and TPG among others). Another metric is SCEE’s successful completion of several large telecom infrastructure projects since entering the market, including passive optical networks, data centers, mining communications backbones, rail signaling, roadside communications, campus distribution networks, and NBN construction (FTTN, FTTC, HFC).

Radius Payment Solutions Ltd

• Radius Payment Solutions Ltd entered the telecom space with their 2018 acquisition of Adam Phones.

• Before the acquisition, Radius Payment Solutions primarily provided fleet and logistics solutions (e.g., fuel cards, corporate MasterCard, and telematics products). However, Adam Phones was an independent service provider of mobile and fixed-line communications.

• Radius intended to continue offering mobile and fixed-line connectivity solutions by leveraging Adam’s unique status of being licensed to operate on all three major networks (i.e., Vodafone, O2, and EE) in the UK. Additionally, the CEO of Radius announced intentions to provide new telecom products alongside their fuel card and telematics products.

• However, Radius acquired Adam in January 2018; the former has only been in the telecom market for a little over a year and a half. As such, metrics of success are difficult to identify, but we speculate that Adam provides Radius with a substantial competitive edge given its advantageous holding of licenses to all the UK’s major carriers.