FWIW Morgan Stanley (Overweight PT $5.50) just released a research note update in response to this

Why we see the loss of Origin Energy agreement as negative for ABB in 2 ways ...

Key Takeaways

• Origin Energy will terminate its white label consumer broadband agreement with ABB effective 12 April 2024
• In FY24 the agreement is expected to contribute EBITDA of ~$14m to ABB, which after re-pricing was expected to reduce to ~A$10m in FY25e
• Post expiry, we now see 6-8% downside risk to FY25e cons. EBITDA of A$175m and 6-8% downside to FY26e cons. EBITDA of A$200m
• ABB has reaffirmed its recently upgraded FY24 guidance of A$105-110m

Aussie Broadband has received an “unexpected notice” that Origin Energy will terminate its white-label wholesale agreement, under which ABB has been providing consumer broadband services to Origin customers, which was anticipated to generate ~A$14m of EBITDA in FY24e. Given expiry notice is effective 12 April 2024, we expect the negative EBITDA impact to be in the range of 6-8% for FY25e and 6-8% for FY26e. Essentially 130,000 Origin broadband customers will be migrated from Aussie Broadband to rival white-label broadband provider Superloop

This customer loss is both a financial + strategic hit for ABB. At first look, we see this news as negative for two main reasons: i) hurts ABB’s FY25-26 earnings + valuation, ABB say the contract would have delivered ~A$10m EBITDA in FY25e representing 6-8% of consensus ~A$175m EBITDA, and a similar 6-8% for full year FY26e; and, ii) it will likely make the prospect any ABB-led small telco industry consolidation harder to achieve, as any potential revised offer from ABB for Superloop will likely have to offer improved terms, post today's news …because on the flip-side, SLC will now likely see upgrades to its consensus earnings expectations, as it has secured the position as Origin’s new white-label provider

We keep OW ABB, the key drivers of subscriber and earnings growth for its core business and the creation of shareholder value remain intact (notwithstanding white label will be a smaller contributor now) but our earnings and valuation will need to be reviewed

DISC: held in RL & SM

Interestingly ABB say the loss of the origin deal will cost them $14m EBITDA, while SLC in their announcement say it will provide them with $19m EBITDA. Either SLC is a more efficient operator or something isn’t adding up here.

To get the 6yr exclusive contract SLC has given Origin 9847690 shares, while the same amount will be granted when all 130000 subscribers are transitioned across to SLC. Then if origin can grow subscribers to 600000 then they are up for another $30m worth of shares. These payments aren’t included in the $19m EBITDA guidance. Talk about buying revenue.

@mikebrisy that is some intense competition, and good timing on your sale. I’m glad ABB didn’t chase this deal as they laid out their side of it in their announcement.