Mitel eyes Australian expansion with Aastra merger

By Dylan Bushell-Embling
Thursday, 06 February, 2014

Mitel eyes Australian expansion with Aastra merger

Mitel Networks has completed its merger with fellow business communications provider Aastra Technologies, and the converged company has an Australian expansion set firmly in its sights.

Under the terms of the deal, Mitel paid Aastra shareholders around $353 million (C$392 million) in cash and stock to acquire 100% of Aastra’s common shares.

Globally, the merger has created a company with combined annual revenues of $1.1 billion, 60 million customers and 2500 channel partners.

Mitel Australia and New Zealand VP Frank Skiffington said Mitel has an Australian market share of around 7-8%, while Aastra captures around 6-7%. “So [this merger is] doubling the size of our business opportunity here, which is pretty exciting. And we’ve got a very good team of sales, support and back-office people at Aastra that will be joining us at Mitel over the next few days and weeks.”

Mitel’s Australian revenues are on track to grow to $12.5 million, while Aastra’s revenues from the market are around $10 million. Skiffington said the company has a target of increasing that to $30 million by this time next year.

The combined company will have more than 5000 customers across Australia, including Oaks Hotel Group, Silver Chain, University of Tasmania, Wilson Parking, Lifeline, RipCurl, Regus, AMP and Pacific Brands. Key resellers include Telstra, BTAS, Ethan, EDV, Azentro, DMV and Ericom.

Part of Mitel’s growth strategy revolves around investing in cloud computing, Skiffington said. “Particularly down here in Australia, that’s very relevant because we’re seeing a strong uptake of the cloud proposition and migration to the cloud in Australia. So much so that we’ve got our own dedicated team here to work with the cloud business in Australia and New Zealand.”

The company plans to increase its workforce with existing channel partners, recruit new partners including larger systems integrators (SIs) and carriers, and develop a professional services business to support its strategy.

“In Australia ... our focus is on folding in a high-touch strategy, the recruitment of new SIs and building a professional services business to complement all of that,” Skiffington said. “The merger with Aastra gives us the ability to execute that strategy must faster, and with a lot more resource to do so.”

Ovum Principal Analyst for Enterprise Telecoms Brian Riggs said Australia is clearly a strategic focus for Mitel. “Over the past several years Mitel has grown its UK business significantly, with the UK being where it has the strongest presence outside of the US and Canada. Mitel is now looking to replicate this success in Australia,” he said.

“However, Mitel faces off against Cisco and Avaya, which have a much more dominant position, as well as Microsoft, which is gaining traction in the UC space. Mitel will find it very challenging to knock out such heavyweights.”

Riggs said the merger reflects an overall trend towards considerable consolidation in the global unified communications market. “Both Mitel and Aastra have been movers and shakers in industry consolidation,” he said. “Aastra is a veritable patchwork of acquired companies. Hopefully the companies’ experience at acquiring competitors and creating an integrated company will make their own merger a smooth process.”

But any corporate merger is fraught with danger, and there is a risk that the complexities of the integration could distract Mitel from its focus on Australian expansion, Riggs said. “This will be a good time for other UC solution developers competitors in Australia to hit Mitel hard, to disrupt its momentum in Australia.”

Pictured: Mitel Australia and New Zealand VP Frank Skiffington.

Related Articles

Tech Insight: Wayne Harper, Zebra Technologies

In our Tech Insights series, we speak with ICT leaders to get their view on what the year ahead...

Unified comms keeps companies connected

As more and more enterprises finally ditch the PABX for the latest in unified comms, the benefits...

Contact centres still important in the digital age

There are three key reasons why organisations with a contact centre should look to implement a...

  • All content Copyright © 2018 Westwick-Farrow Pty Ltd