It’s almost implicit in its strategic focus that M2 Telecommunications Group Ltd (ASX: MTU, OTC: MTCZF) is on constant lookout for opportunities to add services that it can include in tailored packages for its small and medium-sized businesses in Australia and New Zealand.

What separates M2 as on operating business and recommends it as an investment is its ability to consistently deliver solutions for its varied roster of customers. It promises, and it delivers.

Now Australia’s largest network independent telecommunications provider for retail and wholesale fixed-line, mobile and data telecommunications services and a top 10 telecom in Australia overall, M2 has a decade-long history of organic as well as acquisition-based growth, demonstrating the ability to innovate and integrate on one end and the acumen on the other to find outside pieces that fit.

In 2009 acquired People Telecom Ltd and the business assets of Commander Communications, both at bargain basement prices. In 2010 it bought pieces of Clever Communications Australia Ltd and Bell Networks Voice & Data Pty Limited. In 2011 it acquired Clear Communications, adding 20,000 subscribers and AUD70 million in annual revenues, as well as the subscribers and assets of AUSTAR Mobile in March 2011.

In June M2 became the first company to connect a customer to the National Broadband Network (NBN) via its wholesale aggregation alliance with Telstra Corp Ltd (ASX: TLS, OTC: TTRAF, ADR: TLSYY). M2 subsidiary Southern Cross Telco connected a customer in Armidale, New South Wales; M2 will connect more customers in Armidale as well as in Brunswick, a suburb of Melbourne in Victoria state; Townsville, Queensland; Minnamurra, NSW; and Willunga, South Australia, as the latter sites become ready.

The growth plan in the early stages of a transition to new CEO Geoff Horth will likely look a lot like the one predecessor and co-founder Vaughan Bowen followed, as the old CEO will remain with M2 but in a role that allows him to focus on acquisitions as well as supplier relationships. M2’s focus has been on satisfying demand for services that businesses already use rather than trying to create demand with entirely new services. Some of the areas M2 is likely to explore in future–via acquisitions and internal expansion–are cloud computing with hosted solutions as well as the possibility of becoming an aggregator for Australia’s National Broadband Network. In a recent interview Mr. Bowen said M2 will look for bolt-on acquisitions that boost customer numbers and market share as well as higher-risk strategic buys to enter new businesses.

Possible upcoming hosted products–which would be short-term extensions to existing offerings–include video conferencing, unified messaging and storage. Mr. Bowen described software as a service as “probably a bridge too far at this point” but wouldn’t rule it out for the future.

M2’s sales force, for example, could potentially be used as a sales channel for future cloud service offerings.

Even without further acquisitions, however, M2 is on pace to grow from a share of about 4 percent of the small-business telecommunications market to about 10 percent within three to five years.

M2 includes seven key brands. Commander offers bundled telecommunications services and equipment through a national exclusive dealer network. People Telecom provides “personalized” service and “tailored” telecom services via a national dealer network. M2 Telecom’s focus is on loyalty programs and association alliances within a specialist dealer network. M2 Wholesale is the exclusively endorsed wholesale aggregator of Singtel Optus third-generation (3G) mobile services as well as its wholesale supplier for fixed-line and data services.

Southern Cross Telco offers no-contract bundled telecom products focusing in regional areas.

GreenMobiles has integrated a carbon emissions reduction program along with its mobile phone plans. Simply Mobiles bills itself as “the original online home of cheap and unlocked mobile phones.” It offers mobile phone handsets and accessories at discount prices.

Revenue and profit have both risen for each of the past seven fiscal years, the top line by an average of 66.8 percent, the bottom by 59.8 percent. That’s fueled average annual dividend growth of more than 40 percent since the company first declared a regular payout in March 2005 and a total return in US dollar terms of about 1,000 percent since then.

For fiscal 2011 (ended Jun. 30, 20110 M2 reported a company-record net profit after tax (NPAT) of AUD27.6 million, a 72 percent increase from fiscal 2010. EBITDA of AUD48.3 million, also a record for the company, was up 54 percent year over year. Revenue grew 5 percent to AUD427.8 million.

Looking forward, management forecast fiscal 2012 NPAT of AUD30 million to AUD32 million and EBITDA of AUD58 million to AUD62 million. Revenue, however, is forecast to fall by about 6 percent to AUD380 million to AUD420 million because of decision to eliminate a sizable volume of low-margin revenue sources that contributed to the fiscal 2011 top line.

Bottom-line growth is slated to slow in the short term, but management noted that its 2011-2012 forecast is “marked growth by any measure and considerably exceeds the average earnings growth being delivered by the industry at large.” Management plans to “invest more aggressively…into expanding and unifying [our] sales and marketing channels.”

Because of its ample cash position, strong cash generation, low debt and sufficient access to capital, M2 is well-positioned to take advantage of opportunities to grab market share in the small and medium-sized business market and strengthen its position for the medium to long term.

Management boosted the dividend by 60 percent from fiscal 2010 to AUD0.16 per share for fiscal 2011. On a five-year annualized basis, M2’s dividend growth ranks highest among its peers in the telecommunications services industry, and earnings growth is above the industry average as well.

That’s an admirable performance, given the times we’re living in. Of course it helps that Australia has largely avoided the plagues sweeping other developed-world economies. But at a company level M2 has proven it packs the gear to survive and thrive amid any and all conditions, “flexibility” being its main operational calling card. M2 was identified by Business Review Weekly as one of Australia’s fastest growing companies in 2003, 2004, 2005, 2006 and 2008, one of only a few companies to earn the distinction that many times in such a short timeframe. M2 was also named the Deloitte Technology Fast 50 in 2004, 2005, 2008, 2009 and 2010.

As the company notes on its website, “From the outset, the management and team at M2 have been committed to not following the commodity selling approach to telecommunications, which is common approach amongst institutional carriers.  Innovative packaging of M2’s services with other benefits for our customers, creates a distinct competitive ‘point of difference.’” Happy talk like that is even more exhilarating when it’s accompanied by consistent earnings and dividend growth. In fact it’s this record that is the primary “point of difference” for investors looking to build wealth for the long term.

M2 Telecommunications Group, currently yielding more than 5 percent and set to grow its two-times-a-year payout substantially going forward, is a buy under USD3.20 and a new addition to the AE Portfolio Conservative Holdings.