NBN helps iiNet return to organic customer growth

ISP snags 20 per cent share of the NBN market

Australian ISP iiNet has returned to organic growth in its most recent financial year, adding 40,000 new broadband customers in the 12-month period ended 30 June 2014.

The customer boost contributed to a net profit after tax of $65.8 million, up 19 per cent from the previous financial year. The ISP now has 950,000 customers and more than 1.83 million services nationwide.

“Having successfully acquired and integrated a number of complementary businesses over the past few years, the company is now focused on growing organically and maximising its operational performance,” said iiNet CEO David Buckingham.

The ISP completed a $60 million acquisition of Adam Internet on 30 August 2013. The company had around 70,000 broadband customers in South Australia and the Northern Territory.

In FY 2014, the acquired business contributed $48.8 million in revenue and $5.1 million in net profit after tax.

The broadband customer turnaround began in the second half of FY 2013 as iiNet’s NBN offerings gathered steam.

The ISP now has more than 40,000 active NBN customers, which is double the number it had at the end of FY 2013.

More than half of the NBN customers are new to iiNet, Buckingham said.

As a result, iiNet owns 20 per cent share of the NBN market, including 26 per cent of the greenfields market and 19 per cent of the brownfields market, it said.

The NBN customers are 78 per cent fibre, 16 per cent satellite and 6 per cent wireless. More than 70 per cent are on plans faster than the 12Mbps entry-level speed tier.

“Our proactive approach to the NBN roll out continues to pay dividends,” said Buckingham.

“We continue to take full advantage of our capabilities across all access technologies and expect iiNet’s NBN subscriber base to continue to grow as the roll-out speeds up.”

In addition, iiNet grew business customer revenue by 11 per cent year-on-year to $204 million, and this division now accounts for 20 per cent of the total group revenue. The ISP increased its total revenue over the period by 7 per cent to slightly more than $1 billion.

“We will continue to expand our offering in this customer segment while delivering a great service experience,” said Buckingham.

“Our new hosted Microsoft Outlook services make it much simpler and more cost effective for small businesses to manage their IT requirements, and we will continue to expand our suite of these services in FY15.”

Buckingham said iiNet has increased its Net Promoter Score, which measures customer advocacy, to 60 per cent.

“The most pleasing aspect of these results is our return to organic growth,” he said.

“This growth reflects three simple things done very well – customer service, product innovation, and effective brand marketing – which have worked together to lift iiNet brand awareness across all key states and delivered exceptional sales growth.”

Adam Bender covers telco and enterprise tech issues for Computerworld and is the author of dystopian sci-fi novels We, The Watched and Divided We Fall. Follow him on Twitter: @WatchAdam

Follow Computerworld Australia on Twitter: @ComputerworldAU, or take part in the Computerworld conversation on LinkedIn: Computerworld Australia

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