TelcoNews Australia - Telecommunications news for ICT decision-makers
Story image
Superloop secures six-year contract with Origin Energy
Thu, 14th Mar 2024

Superloop has inked an exclusive six-year contract with Origin Energy to provide wholesale internet services. In consideration for this contract, Origin has been issued just under 10 million Superloop shares initially, with the same number to be issued again upon the successful migration of 130,000 consumers. A further $30 million of Superloop shares are to be issued subject to additional customer growth milestones. Origin has previously expressed its aim to increase its broadband customer base to 600,000 subscribers by the 2026 financial year.

The deal with Origin, along with the significant backhaul contract signed in November 2023, places Superloop in the position of being the wholesale provider for two of Australia's largest energy companies. Approximately 130,000 Origin broadband customers will make the switch from Origin's current network provider to Superloop. Once this transition has taken place, it's expected to increase Superloop’s total customer numbers to about 560,000 at that time.

Paul Tyler, CEO of Superloop, is buoyant about the contract win, stating that it "cements our market position as a leading wholesale broadband and backhaul provider." He added, "In order to create strong alignment and pursue growth in broadband customers, we are delighted to welcome Origin as a shareholder and to issue it an option to acquire further shares."

Anticipating Origin's growth milestones, Superloop expects an additional annualised EBITDA increase of over $19 million once the current subscriber base has fully shifted. This prediction takes into consideration Origin's rapidly expanding broadband customer base. Furthermore, Superloop has issued Origin the option to buy 55.6 million Superloop shares, equivalent to approximately 10% of Superloop’s diluted share capital, at the average trading price of Superloop shares on the trading day before Origin exercises this option.

The partnership with Origin is an important stride for Superloop, which has a three-year growth strategy in place. Tyler stressed that this contract not only brings in a significant boost to their customer numbers but also underlines Superloop's value offering. "Australia's energy retailers are investing heavily in product bundling and we are very pleased to be the partner of choice for reliability, service and value," he said.

Besides Origin’s wholesale subscriber base, Superloop reported a steady momentum in its own customer base, having added 21,000 subscribers in the first two months of 2023. In light of these figures, Superloop foresees continued strong growth in FY25.

In line with this promising performance, Superloop has updated its FY24 guidance, predicting an underlying EBITDA increase from the previous $49-53 million range to a revised $51–53 million range. The outlook for FY25 inclines towards an EBITDA growth of 60% - 70% year on year, citing the contribution from the Origin contract amidst other factors.