Origin Energy is set to migrate its 130,000-plus broadband customers currently served by Aussie Broadband over to Superloop, as it switches wholesale allegiances for the next six years.
Superloop said it had struck an “exclusive six-year wholesale contract” with the utility set to receive shares upfront, when the initial migration is complete, and if customer growth milestones are met.
Origin will also have the option to buy more shares in Superloop if it wants to.
Growth milestones would include achieving a broadband customer base of 600,000 subscribers by FY26.
The initial migration of Origin’s existing 130,000 customers over to Superloop is scheduled for FY25.
Superloop CEO Paul Tyler said that “securing the Origin contract is a key progress milestone in Superloop’s three-year growth strategy.”
“It delivers a step-change in our customer numbers and cements our market position as a leading wholesale broadband and backhaul provider,” he said.
“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.”
Once the 130,000 customers are onboarded, Superloop said its total customer numbers would be around 560,000.
Aussie Broadband group managing director Phillip Britt said he was disappointed “not [to have] been able to reach an agreement with Origin to renew our white label wholesale agreement.”
Britt said that Aussie Broadband had always been “disciplined in ensuring every contract delivers value to our shareholders while also ensuring we can maintain a high-quality service offering for customers.
“In the case of Origin, it became clear that, given the contract parameters they set us, we would not be able to meet either of these objectives,” Britt said.
“Given the growth profile of Aussie Broadband, and the retail and wholesale opportunities we are pursuing, we took the view that it was important that a disciplined approach to assessing contracts and how capital is deployed is critical.
“We will continue to carefully assess wholesale opportunities.”
Superloop last month knocked back an unsolicited buyout proposal from Aussie Broadband worth around $466 million.