[ad] The service leader for Cloud is now in Australia. Secure, reliable cloud and managed hosting all backed by 24x7x365 Fanatical Support. Create your free account now.
Buy an Seagate Business Storage NAS for your chance to win a holiday
[ad] Purchase a selected Seagate Business Storage NAS to receive a $20 cash-back AND go into the draw to win a $1,000 Flight Centre voucher so you can holiday in the destination of your choice. T&Cs apply.
How mobile and social media affect your Customer Experience strategy
[ad] How will the adoption of mobile devices and social media affect your Customer Experience strategy? Are you reaching your organisation's customers through these touch points? Click here to download a whitepaper by Fifth Quadrant examining consumer and business attitudes to these new contact channels.
Great articles on other sites
- Turnbull to release NBN review next week
- Canberra blitzes states with NBN take-up rates
- War on whistleblowers from Abbott, Turnbull as ICJ case arrives
- Stockland tech revamp at centre of growth plans
- Clare warns of Gonski-like backflips on the NBN
- Victoria seeks early buy-in to avoid past disasters
- Vtalk bucks the China trend with plan for Aussie build
- Booksellers bristle at Amazon's arrival
- Australian customers upbeat on Dell going private
- FTTP NBN supporters lobby Turnbull
50 things top IT pros need to know
[ad] This 18 page TechRepublic whitepaper explores 10 things you should know to become an epic IT manager, 40 other essential tips to advance your IT career and practical guidance for starting an IT consulting business. Click here to access the whitepaper.
The new IT manager: Trends affecting IT in business
[ad] The tables have turned for IT managers. IT used to be able to dictate which computing assets would be used by employees and how they would be used. No longer. This free GigaOM Pro research paper (click here to download it) gives a solid, fact-based perspective on how IT consumerisation, mobile computing and cloud delivery trends are changing the paradigm.
Analysis, Telecommunications - Written by Renai LeMay on Monday, June 4, 2012 11:48 - 41 Comments
Tiny niche ISPs join the NBN market
analysis When you think about competition on the National Broadband Network, you normally think about major telcos like Telstra, Optus and iiNet battling it out to win Australia’s broadband spend. But the truth is that a large number of very small ISPs have already joined the NBN market and are also competing.
The depth of competition in the emerging NBN market can be witnessed by looking at a page on NBN Co’s site which the wholesaler has set up to provide information and links to the retail Internet service providers which sell services to customers over its network. Initially the page only contained a handful of ISPs. But over the past few months, as commercial services have launched on the NBN, several dozen more have been added.
The interesting thing is that I’ve been covering Australia’s telecommunications market for the best part of a decade, and I’ve never heard of most of these companies.
Take Aardvark Internet (whose name appears calculated to win it first place in any directory of ISPs). The company’s modest website states that it’s a mid-sized ISP which providers Internet and Internet telephony services to all Australians, having been established 18 years ago in 1994. It’s hard to know just what sort of NBN options Aardvark expects to provides to customers. Although it lists access to the NBN’s fibre footprint as an available product on its site, it doesn’t list any pricing plans, taking a similar approach to its ADSL broadband options and encouraging prospective customers to contact it directly instead. Later this year it also plans to offer access to wireless and satellite services on the NBN.
Another company, Ace Internet Services, also has a long pedigree, being established back in 1995 to provider Internet to New South Wales’ Southern Highlands region. The company offers a complete suite of NBN pricing plans, ranging from 12Mbps plans for $45.95 per month with a meagre 10GB of data quota included, right up to a fairly competitive 100Mbps plan with 400GB of data included for a monthly cost of $102.95.
There are a number of other very similar ISPs to these two — typically ISPs focusing on a specific region which have had their roots in providing dial-up and ADSL broadband throughout the 1990′s and 2000′s, and have built up a moderate customer base over that time. These ISPs appear to be making a pitch to continue their business operations under the NBN by continuing to focus on their region and providing better, highly Australian customer service to customers in those areas. Some examples include RedBack Communications, Fastel, North Queensland Telecom and more.
There’s also another class of emerging niche providers: Those that appear to have focused on satellite and wireless broadband in the past to rural and regional areas, and are now extending their platforms to cover the NBN, as well as simultaneously signing up to offer fibre as well. Some examples of these companies might be SkyMesh, activ8me and NuSkope. Most of these also offer fairly competitive NBN plans in general.
However, there are also just some really weird quasi-ISPs out there which have signed up to provide NBN fibre services. Take DeVoteD NBN, for example. The company appears to primarily be a DVD, movie and game retailer and renter, which has a website and also a retail premises in Mill Park, Victoria. The company’s website boasts: “DeVoteD DVD has been in operation since July 2000. We are the largest Online DVD, Movie and Game store in Australia.”
The company has now set up a dedicated NBN area of its business. “Whilst new to the Retailing on NBN services,” the company’s website states (original capitalisation and punctuation) “We have built a loyal customer base both online and at our Rental in store at MILL PARK. With over 50,000 online customers and over 6,000 active customer at our MILL PARK Store. We pride ourselves in customer service and products we offer .” Despite its relative newness to the NBN market, however, DeVoteD NBN actually has some pretty decent broadband plans, with the company offering 100Mbps plans with 800GB of quota for $109.90, when a basic telephone package is included.
The quality of the websites advertising these retail NBN services from small ISPs also varies wildly.
DeVoteD NBN, for example, has what I would describe as a pretty atrocious website. It’s pretty functional and gets the job done, but it doesn’t look pretty. The same could be said of the ORCA Network, which boasts that it’s “an Australian owned and operated telecommunications company created with you, the customer, in mind”.
But for sheer poor design, the website of a new company entitled ‘MyFibre’ really takes the cake. The company’s use of poor quality images, fonts in bright colours which aren’t anti-aliased and poor English comes across as amateurish at best. “You won’t have heard about us before now, but that doesn’t mean we are some dodgy fly-by-night company,” the website boasts. “We are passionate about all things internety & all things computery. And we don’t think that we have to be excessively formal to bring you a great service either!”
Lastly, there are some companies which have been set up specifically from scratch to provide broadband services over the NBN. The best example of this is Australian Broadband Services (AusBBS), which hasn’t launched yet, but plans to this year. the company describes itself as a “NBN generation ISP” and claims to have access to lower cost business models and technology specifically designed for the high-bandwidth environment of the NBN, as opposed to existing ISPs, which need to deal with legacy broadband models such as ADSL.
“AusBBS will differentiate itself in the marketplace with a simple low cost product range that offers subscribers flexibility and clear value in comparison to established ISPs and other Telcos,’ the company’s website states. The company’s CEO Rob Appel told Computerworld in April that the company had licensed its platform “in the cloud” and was “the first purely NBN virtual ISP”.
Now, it’s certainly interesting checking out all the niche companies which have signed on to providing NBN services. But realistically, are these companies likely to provide any significant competition in the NBN marketplace, given the dominance of major companies such as Telstra, Optus, iiNet and TPG, which have pretty much carved up Australia’s broadband market between them at the moment? From a cursory glance, I’d consider it pretty unlikely.
Each of these small ISPs has put their own spin on the market opportunities that the NBN providers. Some have focused on specific geographic areas. Some have focused on specific technologies, such as satellite broadband. Some have focused on being quite ‘anti-corporate’, or more Australian than the major players. And some have focused on marketing to existing customers in other areas, with their NBN services as a value-added option to their existing main product lines.
But in each case, it seems clear that these ISPs are not going to have a significant impact on the level of competition in Australia’s broadband market.
The first reason that I can say that is that in general, the NBN plans being offered by the various players are all pretty similar. Usually they top out at around 400GB of download quota, and offer 100Mbps plans for around the $100 mark, with a range of lesser plans underneath this.
But, with the exception of Telstra, whose NBN plans are pretty overpriced compared with the rest of the current market, these plans aren’t that different from those offered by the major companies, and often they’re worse. iiNet and Optus already offer NBN plans around that level, and offer bundled services and value-add options which the minor ISPs don’t, such as access to the FetchTV IPTV service, mobile phone bundles, quota-free downloads and more. Much of the similarity no doubt comes from the fact that quite a few retail ISPs providing services over the NBN will actually do so through a third-party wholesaler such as Optus, and thus will have limited scope in terms of pricing innovation, due to reduced margins.
When you combine this home truth with the obvious fact that these major telcos have a huge marketing muscle which they’re continuously flexing to generate blanket advertising, it’s hard to see how smaller ISPs will be able to compete, even in rural areas. Both iiNet and Optus have blanketed Australia with advertising over the past several years, and this trend looks set to continue. I’m originally from a small country town myself, and I can say that there’s no way regional players will be able to win many adherents in the face of these major brands.
Of course, there is still the potential for highly financed new players to enter the market and conduct similar marketing campaigns. I’m thinking of the way which companies like TPG and Dodo have come from relative obscurity over the past decade to win large slices of Australia’s broadband market, purely by keeping their costs (and sometimes service levels) down while constantly advertising cheap broadband plans to gain scale.
We could see this kind of activity in the NBN world from new players. I’m sure that major supermarket chains such as Woolworths and Coles will look into the opportunities offered by the NBN at some point, for example, as they have done in the financial services and mobile telecommunications markets previously, using their existing customer base to drive sign-ups. In addition, I’m sure we’ll also see one or two extra major players enter the NBN market. Vodafone, for example, has publicly cited its interest in the area, and of course TPG and Dodo will start providing NBN services as the network gains some scale.
Overall though, and despite the fact that I don’t think these small ISPs have much chance of competing strongly in the NBN market, their participation in the whole process is fascinating. The variety of the business plans being pursued, the fact that many companies appear to see quite a lot of opportunity in the NBN infrastructure and the range of players means the whole scene is evolving in a fascinating way, and I’ll be interested to see how it develops in future.
Would you sign up with a niche ISP for NBN services? Or would you only buy services from a major ISP? Post your thoughts in the comments below.
Latest Delimiter 2.0 articles (subscriber content)
|Politicians from Australia’s major parties need to stop issuing ludicrous blanket pardons for the intelligence community’s ongoing misdemeanours and start applying a basic modicum of transparency and accountability to this important national security function.|
|The independent pro-fibre National Broadband Network movement is doing a far better job of promoting Labor’s Fibre to the Premises-based NBN policy than Labor itself. When is Labor going to wake from its slumber and start supporting this scrappy but energetic grassroots network of activists?|
|Ziggy Switkowski's first substantial public appearance since being appointed NBN Co chief executive has starkly demonstrated just how different he is from his predecessor, Mike Quigley, and just how strictly he will adhere to the guidelines which his patron, Communications Minister Malcolm Turnbull, has set for him.|
|Australian technology companies have been virtually absent from the the nation’s public stockmarket over the past decade as the stigma of the dot com bust took its toll on investor confidence. But a clutch of new listings planned for the closing months of 2013 shows renewed interest in the sector and that local entrepreneurs are smelling money in the air once again.|
|NBN Co’s Strategic Review process gives the company an unmissable opportunity to re-evaluate the early decision to deploy its FTTP network primarily through Telstra’s underground ducts. The company and its new Coalition masters must now seriously consider deploying more fibre aerially on power poles in an effort to speed up its rollout substantially.|
|That moment which many Australian technologists fervently hoped for but never expected to see has come to pass: Simon Hackett has been appointed to the board of the National Broadband Network Company. But what questions should the Internode founder be asking NBN Co’s executive management team? Here’s five ideas to start with.|
|The rapid replacement of respected NBN Co chief operating officer Ralph Steffens with a Telstra executive who appears less experienced with fibre rollouts but better politically connected represents a key signal that NBN Co’s senior executive hiring process has now become completely politicised and is no longer independent from the Federal Government.|
Enterprise IT, News - Dec 6, 2013 12:50 - 0 Comments
More In Enterprise IT
- Payroll disaster: Queensland sues IBM
- End of an era: Oracle Australia’s ‘safe hands’ leaves
- Qld launches whole of government IaaS panel
- Defence finally allows staff iPhones, iPads
- NSW Govt refreshes ICT Advisory Panel
News, Telecommunications - Dec 6, 2013 11:54 - 90 Comments
More In Telecommunications
- NBN Co internal FTTN analysis: Turnbull refuses to retract inaccurate claim
- Defying the Senate: Turnbull to release NBN Review by end of 2013
- Senate to force Turnbull to publish NBN Review
- Get on with FTTN job, Quigley tells NBN Co
- Senate circus shows politics has no place in NBN
More In Industry
- Xbox One goes off with a bang … but will the PS4 launch eclipse it?
- It’s not just Freelancer: Aussie tech IPOs are back in general
- Freelancer’s IPO: A billion reasons to care
- Australian retailers online: Late to the party and much to do
- DesignCrowd picks up another $3m
Digital Rights, News - Dec 5, 2013 14:08 - 25 Comments
More In Digital Rights
- Global privacy group files formal ASD complaint
- Labor open to surveillance discussion
- Snowden an “American traitor”, says Australia’s Attorney-General
- ASD goes rogue with Aussie metadata
- It’s live: Delimiter publishes AGD FoI mirror