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  • News, Telecommunications - Written by on Tuesday, January 10, 2012 10:53 - 37 Comments

    Hackett hammers iiNode critics

    news Internode managing director Simon Hackett has strongly defended the pre-Christmas deal in which rival iiNet bought out his company Internode, stressing the strength and duration of his long-term relationship with iiNet’s management team in two outspoken forum posts published last week.

    The transaction is expected to be completed by 29 February, 2012. Following the acquisition, Internode will trade as a separate business unit and Hackett will continue as the managing director with his existing team, although he will also hold approximately 7.5 percent of iiNet’s shares, making him one of the company’s major shareholders. Hackett has acknowledged that the Internode sellout to iiNet was partly triggered by Internode’s inability to gain enough scale to compete in a National Broadband Network (NBN) world.

    Some online critics had speculated that Hackett would shortly take a seat on the iiNet board, despite Malone saying that Hackett would join the iiNet board only after relinquishing his executive responsibilities with Internode. “It’s just a little crazy to have me reporting to Michael Malone and the board and also being on the same board at the same time,” Hackett wrote on Whirlpool in response last week.

    “Meanwhile you seem to be framing this as me turning into an inflexibly driven supplicant of Michael Malone, and that framing indicates that you completely fail to appreciate how business works at this sort of high level. It’s a relationship based on trust, not one based on my being a mindless puppet.”

    Hackett said that he wasn’t finished with his current goals of finding new ways to drive interesting new strategic outcomes for Internode and its staff and customers. Referring to a potential future position on the iiNet board, Hackett said that it would definitely make him a key decision-maker in the company group.

    Hackett expressed his frustration over forum commenters implying that everything he said since the announcement of the buyout was suspect: “So I make a business decision and now I’ve turned into a professional liar? I find that pretty insulting.” He also appeared angry about statements concerning Internode’s customer base being part of the assets he’d sold to iiNet and the possibility that Hackett and Malone would lie to the Internode customer base.

    In response to a comment that the announcement of the deal gave no concrete information about the future of the company group, Hackett pointed out that the transaction was still incomplete. He called the board members of iiNet and Malone himself “very smart people who I enjoy working with.” He also directed commenters to the Internode blog for significant information. He termed the deal as an exercise in combining the strengths of two major companies in the market which would in turn, combine the strengths of the leaders of the two companies. “It’s exciting, and it’s got a lot of positive potential as a result. Will it all be perfect? Obviously not,” Hackett said.

    Hackett also responded to a statement that Internode’s customers had always paid extra for a higher quality service which was alien to iiNet, providing statistics to indicate actual customer opinion.

    Reacting to a suggestion that he would face pressure to make changes to Internode, Hackett said: “You may not appreciate how little respect for my own skills and abilities, or that of my large and capable staff, the above implies.” Hackett also emphasised upcoming positive changes, sarcastically saying, “You don’t seem to consider the potential that some of these unspecified changes forced upon the small and impressionable Mr Hackett by the big bad Michael Malone and his board might be good things. Internode does not begin and end with me.”

    The Internode chief quoted examples such as “thriving as a national NBN leader, having the largest direct DSLAM footprint in Australia, and remaining in the marketplace as a sustainable and capable innovator instead of being slowly choked to death in a saturated market by larger players … these are things that don’t seem like bad things, at face value, to me at least!”

    Following his statements, the executive signed off from Whirlpool by asking that commenters refrain from framing conspiracy theories. “I will now stop responding to your posts on this topic now because they’re solidly circular in their nature (as, by extension, are my replies to it),” he said.

    Image credit: J. D. Hancock, Creative Commons

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    1. Posted 10/01/2012 at 11:05 am | Permalink | Reply

      Fair enough – kudos to Simon for standing up for himself – (it’s not like he doesn’t do that all the time anyway!)

      I know some people have expressed concern over the deal – (particularly with respect to a reduction in the number of players in the market) – but I personally don’t see a lot of negatives in it.

      As he says – will everything be perfect? No.

      Nothing ever is.

      • Zag
        Posted 12/01/2012 at 6:38 am | Permalink | Reply

        People aren’t fussed about the deal.

        But Simon keeps saying the company is 100% independent which isn’t going to be true for a start and will keep doing what ever it likes which won’t happen either.

        The company has been sold off and he’s trying to be the typical family run business/owner who is kept just so things get swapped over some what smoothly then after 6 months we’ll probably be let go or leave the company once they start to take over more things in the company and he simply has no control or isn’t really needed anymore.

        It happens all the time.

        Last year the company I’m at had a problem ended up with a new boss and that new boss got rid of the old one after 2 months.

        Simon is simply living on delusional thinking that he’ll be able to do anything he likes, from what I can tell in the thread about this the internode DSLs are now classed as iiNet DSL exchanges now and the deal isn’t even complete already.

        Yet iinet and himself are still running around pretending internode hasn’t really been sold off and nothing is going to change.

    2. Anna
      Posted 10/01/2012 at 11:07 am | Permalink | Reply

      Renai, do you have some kind of an erotic thing for Simon Hackett? You seem to write a disproportionately larger amount of articles about him than just about anyone else in the industry.

      • Posted 10/01/2012 at 11:08 am | Permalink | Reply

        He’s a disproportionately more interesting person ;)

      • Clinton
        Posted 10/01/2012 at 11:18 am | Permalink | Reply

        i think it’s more to do with the fact that Hackett places himself in the public eye a lot more than most others in the industry.

        with the exception perhaps of that Linton guy…. whoever he is.

    3. billy
      Posted 10/01/2012 at 11:14 am | Permalink | Reply

      so the headline is “Simon Hackett finds something else to bitch about”….boring. Just do what I did, leave Internode and tell anyone that’s interested in changing/finding an ISP to avoid Internode. Easy.

      • Tubsta
        Posted 10/01/2012 at 11:34 am | Permalink | Reply

        That’s what I did and it feels so great to the free of the whining and inaction. Simon would go on about the cost of TW products, though when there was competitive back haul or even other wholesalers there were mountains of excuses why Internode couldn’t enter these segments with different product sets (than the current Reach plans).

        The Telstra blame is just a convenient smoke screen.

        … Off to put on the flame suit in readiness for the fan bois.

        • Wayne
          Posted 10/01/2012 at 3:09 pm | Permalink | Reply

          +1 to Tubsta.
          Always complained about the cost of Telstra wholesale when you see other players in the market increase their download limit. Why couldn’t internode.
          Thats why I left!

          • Jean W
            Posted 11/01/2012 at 4:23 pm | Permalink | Reply

            1) Quota limits are not the only concern
            2) Other ISPs sacrifice quality (both of the connection and otherwise – tried dodo’s tech support lately?) to boost the limit
            3) TW does not have standardised pricing. If another ISP retails for less, they may be charging them less. The individual pricing is not known because of contractual reasons.

        • Jean W
          Posted 11/01/2012 at 4:21 pm | Permalink | Reply

          A clever attempt at trolling.

          Your dismissal of the TW price squeeze is invalid. “Competitive backhaul” does not overcome AGVC charges unless you are using non-TW ports, and Internode already utilises Optus ports where they are available. If TW costs are higher than Bigpond retail costs, then the price squeeze exists, no matter how much you claim that someone is “whining”.

          It really just sounds like you’re butthurt because your favourite ISP is being merged. /Yawn.

          • Posted 11/01/2012 at 5:25 pm | Permalink | Reply

            — If TW costs are higher than Bigpond retail costs, then the price squeeze exists —

            the alleged “price squeeze” only arises because Bigpond and other 100% TW DSLAM ISPs cross-subsidise their regional subscribers from metro profits. iiNet and Internode refuse to do so. unfortunately, everybody is accessing the same piece of infrastructure and ONE infrastructure can only support ONE business model, and not TWO.

    4. Tubsta
      Posted 10/01/2012 at 11:44 am | Permalink | Reply

      Quoting Simon: “So I make a business decision and now I’ve turned into a professional liar? I find that pretty insulting.”

      I don’t think people would have had a problem with this if they weren’t (only months ago) assured [by you] that Internode was not for sale. Making a decision to sell is not something you would have made overnight. Maybe your customers are a little peeved that the assurances Internode wasn’t for sale, when, in fact, you were actually considering off-loading it.

      I’m not one of the ones on whirlpool that accused you of lying far from it (I have better things to think/talk about), my statement is simply based off observations made in the Whirlpool forums over the years.

      • James Usul
        Posted 11/01/2012 at 12:29 pm | Permalink | Reply

        About this:

        “I don’t think people would have had a problem with this if they weren’t (only months ago) assured [by you] that Internode was not for sale. Making a decision to sell is not something you would have made overnight. Maybe your customers are a little peeved that the assurances Internode wasn’t for sale, when, in fact, you were actually considering off-loading it.”

        Where did Simon Hackett provide that assurance, exactly? Please post a link.

        • Tubsta
          Posted 11/01/2012 at 3:40 pm | Permalink | Reply

          PT states – “happy to fly the independent flag for the time being.” in the article that is part of this link http://forums.whirlpool.net.au/archive/1693122 . One would hope the CEO would know if the ranch was up for sale.

          .. and from the man himself – SH http://whrl.pl/RcODvd (7-Jul-2011, 5.5 months prior to market notification)

          Please note, I said “based off observations” not “I had clear proof”, however, I did your job for you and researched it for you as someone that is skeptical of my statements would have :-)

          • Jean W
            Posted 11/01/2012 at 4:25 pm | Permalink | Reply

            “For the time being” means “things could change in the future”.

            Welcome to the future.

    5. Mathew
      Posted 10/01/2012 at 2:24 pm | Permalink | Reply

      You should just search-replace every instance of ‘Whirlpool’ with ‘Whingepool’ from now on. Go on, do it!

    6. ozimarco
      Posted 10/01/2012 at 2:59 pm | Permalink | Reply

      Simon’s openness and transparency may be appreciated by many but it also leaves him vulnerable to the opportunists who will jump on anything who says and turn it against him. I think selling Internode was the right move, good for Simon, Michael and all their customers, and I welcome it.

      • ozimarco
        Posted 10/01/2012 at 3:00 pm | Permalink | Reply

        correction: ‘anything he says’ instead of ‘anything who says’.

      • alain
        Posted 11/01/2012 at 10:25 am | Permalink | Reply

        Well let’s wait and see first if the Internodes plans retain their individuality or go the way of Netspace, Westnet and AAPT thats is iiNet clone plans, otherwise if you are a Internode customer what’s the difference between you and a iiNet and their clone ISP’s customers, especially in the crossover areas of iiNet DSLAM’s at non-Internode enabled exchanges?

    7. Posted 10/01/2012 at 4:45 pm | Permalink | Reply

      — Some online critics had speculated that Hackett would shortly take a seat on the iiNet board, despite Malone saying that Hackett would join the iiNet board only after relinquishing his executive responsibilities with Internode. —

      iiNet did not acquire Internode because they were looking to recruit new managerial talent. they were clearly buying Internode’s customer base to gain even greater scale. also, iiNet would have insisted that Hackett retain managerial responsibilities for a certain transitional period to assuage Internode customers and limit any loss due to subscriber churning.

      Internode will gradually be assimilated into the iiNet fold, so i can’t imagine Hackett will want to hang around for long reporting to Michael Malone. it is also hard to imagine that there is room for two CEOs in a small organisation such as iiNet. obviously, Michael Malone (and the rest of the senior mangement) did not acquire Internode so that he would lose his job.

      while Hackett may join the Board of Directors of iiNet, i doubt he will retain an executive role within iiNet. a case of too many chiefs and not enough indians.

    8. Posted 11/01/2012 at 10:31 am | Permalink | Reply

      Its not that I don’t believe Simon and the terms of this acquisition are different to previous ones (board seat, 7.5% ownership stake etc) I just don’t believe IINET!


      “Westnet will still continue to run as a separate business, operated and managed by Westnet staff. Working side-by-side will increase the potential of both companies – which we believe will be a win for customers, our staff and the industry overall. Customers won’t see any changes to pricing plans, but some improvements to services are already on the way.

      Within a short period, pricing and plans were made the same as IINET – the website made identical to IINet just different colours and everything that made westnet westnet removed.


      Will my service/plan change?
      No, it will be business as usual with Netspace’s offerings remaining independent of iiNet. Overtime, it is anticipated that Netspace will be able to leverage off a number of iiNet product innovations, eg IPTV.

      Will iiNet be integrating Netspace?
      From a customer perspective it will be business as usual. iiNet intend to run Netspace as a wholly owned subsidiary.

      So lets get this straight. Forced changes from existing plans to new ones (IINET stock plans) removal of datablocks (specific feature/service offered by Netspace) because it couldn’t be accommodated within IINETs plans and systems is ‘independent of IINET and business as usual’?

      AAPT was a little different and straight out they talked about forcing people off plans etc, but can you see why I dont beleive anyone when they say ‘nothing will change, business as usual’?

      • Posted 11/01/2012 at 10:32 am | Permalink | Reply

        missed a trailing / in one of my bold tag. Feel free to fix Renai and delete this comment!

      • alain
        Posted 11/01/2012 at 11:18 am | Permalink | Reply

        But amazingly Joel the NBN apologists see all of that as having no effect upon competition at all, and it’s all good.

        The Internode apologists including most of the moderators from Whirlpool must be a teensy bit worried though.


        • Jason
          Posted 11/01/2012 at 1:29 pm | Permalink | Reply

          this was another thing want annoyed me with internode, to get away from telstra go onto their agile network if there is space available in your area.

          yet when you are on agile and something goes wrong, internode doesnt take the blame they still blame telstra, so do supporters on the whirlpool forum

          internode they take the credit when things are ok on agile, nothing to do with telstra yet when things happen

          they quickly blame telstra

          why i left internode ages ago

          • Jean W
            Posted 11/01/2012 at 4:27 pm | Permalink | Reply

            Has it occurred to you that they blame Telstra for line issues because Telstra owns and operates the lines?

            • Jason
              Posted 11/01/2012 at 8:13 pm | Permalink | Reply

              see thats my point always blame telstra and not think they could be in the blame even though , theres been a fault in the agile network

          • Joe Public
            Posted 11/01/2012 at 5:27 pm | Permalink | Reply

            You really must learn the difference between “explanation” and “blame” – it isn’t that hard.

            • Jason
              Posted 11/01/2012 at 8:14 pm | Permalink | Reply

              Joe Public

              ok why blame telstra , when there is a fault in the agile network

              • Joe Public
                Posted 12/01/2012 at 11:11 am | Permalink | Reply

                I think you meant to ask “why explain that the issue has occurred within infrastructure outside of the immediate control of Internode”?

                I guess it is because that is the truth and to say anything else would be false or misleading. And to not explain that Internode has to go through a third party would simply frustrate the customer who might get the impression that Internode should be able to just hop in their Node-mobile and go out and fix the problem themselves.

                If you have an axe to grind because Internode may have made a mistake at some time and indicated a fault within Agile infrastructure was elsewhere, then you are going to have to be much more specific.

    9. Log
      Posted 11/01/2012 at 12:00 pm | Permalink | Reply

      I love armchair experts that comment on someone elses business and how they should conduct their own businesses.

      I think many should mind their own business and get a life eh armchair experts?

    10. Simonh
      Posted 11/01/2012 at 2:07 pm | Permalink | Reply

      I was sick of you loosers attacking my $105M handshake. stiff to the iinode staff who thought they where gettin a piece of my pie.

      Anyhow must run helicopter salesman are wating on the iinode helipad.

      • The Guy Above Me Is A Douce
        Posted 11/01/2012 at 4:40 pm | Permalink | Reply

        You sir are a DOUCHE! Couldn’t spell Hackett so you went with Simon H?

    11. Simon Shaw
      Posted 11/01/2012 at 3:35 pm | Permalink | Reply

      What Simon may not understand, is that many people really really dislike iiNet.

      Not because of the services reliability or speed issues, but because of iiNet’s culture.

      iiNet are the equivalent of eating too much sugary food at a kids birthday party, leaving you with an sore tummy. A lot of things like Bob, iiNet adverts etc make a lot of us feel like we’ve had too much fairy bread.

      Whereas Internode where no nonsense and appealed to the techie crowd.

      Personally, I won’t touch iiNet after being with them twice previously.

      • Posted 12/01/2012 at 12:28 pm | Permalink | Reply

        Have to agree with this.
        iiNet’s service is great, great speeds, but they have aimed them selves at a different market. The mums and dads, that look for a BOB, that do not realise the impacts of onpeak offpeak etc etc.

        At the end of the day, it was Simon’s business, to do as he see’s fit.

    12. Diachronic
      Posted 11/01/2012 at 10:59 pm | Permalink | Reply

      It is obvious that with all the upcoming retail competition in an NBN world he just couldn’t hackett so he sold out…


    13. Richard
      Posted 12/01/2012 at 5:14 pm | Permalink | Reply

      Not sure if I understand the allocation of shares to Simon Hackett correctly – but if I do, perhaps this is also a big win for MM in more ways than one?

      iiNet group gets ownership of Internode which increases the iiNet group’s marketshare/customerbase by a decent amount – this is the obvious part… However, MM also gets a like-minded ally in Simon Hackett who is now a major (7.5%) shareholder in the iiNet group. Perhaps between the 2 of them, they will be well placed to fend off any hostile activity from other shareholders (EG TPG)?

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