news Long-time Internode chief technology officer John Lindsay has resigned from a similar position at the company’s owner iiNet, just two years after iiNet bought the South Australian ISP.
When iiNet announced it would buy Internode in late December 2011, the two companies were careful to highlight their plans for the South Australian ISP led by well-known industry figure Simon Hackett to remain independent from its new parent. “This is another iiNet acquisition and Internode will just disappear, right?” stated a question posted as part of Internode’s frequently asked questions document for the transaction. “No, it isn’t,” came the answer from Hackett. “Internode will be remaining as a separate operating company within the group, with its own identity and its own staff. I am staying at the helm of Internode as is the rest of the management structure of the Internode & Agile company group.”
At the time, Hackett emphasised that his new status as a major shareholder of iiNet itself would mean that Internode would not “just disappear into iiNet without trace”, and that there was little reason for the company to harmonise its broadband plans and offerings with those of iiNet, as other companies subsumed into iiNet — such as Netspace, Westnet and AAPT — had in the past.
However, iiNet has increasingly taken a number of steps to integrate Internode within its larger overall business over the past two years.
Hackett himself quit Internode to take a spot on iiNet’s board in May 2012, and quit iiNet entirely late last year for a role on NBN Co’s board. Also in May 2012, long-time Internode CTO John Lindsay, who had been with Internode for 11 years, was promoted to the role of CTO for the iiNet group as a whole. Last week he revealed he would resign from that post and leave the company.
Also in May 2012, iiNet announced it was merging iiNet’s 3FL and Internode’s games.on.net gaming platforms. In March that same year iiNet introduced Internode’s data blocks feature to its own broadband plan structure, and then several weeks later iiNet also dumped the on-peak/off-peak split of its broadband plans, offering customers the same base system as Internode has long promoted for its own plans. Both moves came after Internode announced its intention in February to migrate customers using wholesale offerings from rival companies like Optus and Telstra to iiNet’s ADSL infrastructure where possible. With similar moves occurring on iiNet’s end, the move effectively integrates the ADSL infrastructure owned by the two broadband companies.
And in June 2013, Internode changed its business broadband bundled plans to be identical to those of parent iiNet, in the latest sign that the Adelaide-based ISP will follow other iiNet acquisitions Netspace, Westnet, AAPT and OzEmail and become just another brand under the larger iiNet group.
The departures of Lindsay and Hackett, when added to the pre-acquisition September 2011 restructure of Internode’s management team (which saw four of its most senior technical managers leave the company) and the 2012 departure of Internode chief executive Patrick Tapper, leaves Internode without much in the way of visible senior executives leading the company’s operations, compared to its operation as an independent entity, with most of the company’s visible senior executives now having left the company or switched into different roles.
Lindsay noted on his website that the last two and a bit years have been a career highlight for him, “selling Internode, building iiNet a global IP network with around 150 gigabits of lit submarine capacity, rolling out Australia’s first live VDSL2 network in Canberra, buying Adam Internet, leading and managing over 150 highly talented and very geeky staff, growing the WiFi network to over 1,000 access points and being the CTO of a billion dollar listed company”.
“It’s been a privilege to work with the iiNet exec team who are the best service provider management group in the business,” wrote Lindsay.
However, the executive also noted that he was “almost double platinum with one airline and gold with two others”. “I’m not going to miss the travel nor the stress of being responsible for about half a billion dollars of costs every year,” Lindsay said. The executive wrote that he was “taking a break from the corporate world and setting up as a consultant”, planning to “spend lots of time working with start-up and early stage businesses”.
At an indeterminate time over the past several years, Internode appears to have removed the “management” page from its website, where profiles of its senior executives were detailed. This and the other changes listed above appear to signal that the company is not remaining as a separate entity within the iiNet Group, as Hackett had stated following the acquisition.
Look, I don’t want to be too harsh here. John Lindsay has been one of the most respected executives in Australia’s telecommunications industry for several decades. He’s worked for iiNet before and clearly deserves a long break from high-level duties. This is a personal choice, and it’s not reflective of the state of affairs at Internode or iiNet. We hope Lindsay enjoys the next stage of his career and we give thanks for his efforts.
However, it’s also important to hold those in power to their words. I remind readers that Hackett wrote in December 2011: “Internode will be remaining as a separate operating company within the group, with its own identity and its own staff. I am staying at the helm of Internode as is the rest of the management structure of the Internode & Agile company group.”
Just two years later, that statement is increasingly false. Internode now appears to be being directly managed by iiNet, its management team having largely departed, and its product set is increasingly becoming synchronised with that of iiNet. As I’ve written quite a few times, it is my opinion that this kind of “Borg” integration behaviour by iiNet has directly contributed to the ongoing decline in competition and harmonisation of product lines in Australia’s telecommunications industry. It’s only a matter of time until iiNet takes the next step and brings the rest of Internode’s products into line with other ISPs in its stable such as Netspace, Westnet, OzEmail, AAPT and so on. And that is a sad thing for innovation in Australia’s ISP industry indeed.
If you think I’m wrong, ask yourself how many new broadband plans you’ve seen launched in Australia recently. It used to be we used to see new plans released virtually every month. Now, the major ISPs — Telstra, Optus, iiNet and TPG — are basically content to update their plans once a year, if that. Great.
Image credit: Internode