ISPs in 2010 - iiNet

iiNet's MD, Michael Malone, on what the industry can expect in 2010

With the revelation of the NBN, the potential break up of Telstra, the AFACT vs iiNet and ISP-level filtering trials, 2009 has shaped up as quite a year for ISPs. What could be in store in 2010? We ask some of the leading internet service providers. In this edition, iiNet's MD Michael Malone.

Computerworld: What opportunities do you see to grow your business in 2010?

Michael Malone: The biggest opportunity for iiNet is to continue building on service, brand and content. We are now in a switchers’ market, meaning that pretty much every new customer has to be won away from a competitor. The reverse of that is that losing a customer is really stupid. We have to make sure that every experience that a customer has with iiNet is top quality, so there is never a reason to leave. In our industry, service levels are pretty low generally, and I believe it will take many years for our competitors to really imbed a true service culture into their businesses.

We recently launched BoB, a sexy unit that handles telephony and broadband in one box, and tries to hide all the hard techy stuff. We’ve sold 15,000 of those units already, and we’re working with Belkin to improve it even further in the next year.

We’re also real close now to releasing iiNet’s first set top box, delivering IPTV, Video on Demand, and some generic net access to the lounge room, along with the usual free to air channels. I’m hoping to see friendly user trials in January and a broader release by March or April.

In regards to our network itself, we will continue to roll out new DSLAMs in metro and regional areas, which will see more customers on our own network.

We’re on the lookout for merger and acquisition opportunities as well. iiNet and Westnet have been together nearly two years now and that’s been very smooth. We’re ready for the next one.

How likely do you think it is that Telstra will be broken up? If it is, how will this affect the industry?

It seems inevitable that some form of separation will occur in Telstra’s future. Whether that is ‘structural’ or ‘operational’ remains to be seen. The Government’s preference is pretty clearly ‘structural’, which would see two separate legal entities, one owning and operating the infrastructure and one supplying retail products and services, buying access from the network owner.

A structurally separate network owner is a Good Thing. Their strongest motivation would be to get as much traffic onto the network as possible, instead of the current situation where Telstra is directly motivated to hold back wholesale products and rort on price in order to protect its retail business.

Bring it on.

Q: How do you see the NBN affecting the market in 2010?

I don’t think we’ll see a lot of change in 2010, because no one really knows what’s going on. This government promised transparency and accountability but, at least in the telco sector, that’s been embarrassingly absent. We’re talking about a $43 billion project here, but we know nothing yet. Therefore the only choice is to continue “business as usual” until we see some real detail.

It does look like the Tasmania trial will get up in 2010, which is very exciting and we’ll be able to start answering some questions. We’re keen to get some of our Tasmanian customers onto the NBN as it rolls out, so we can understand what impact it will have on customers, before this goes national.

Q: What telecommunications technologies are likely to make a large impact in 2010 and why?

In the short term, ADSL2+ is still the main game. iiNet customers get an average of 12M on ADSL2+. That’s enough to start playing with IPTV, VoIP, VoD and so on. I know it’s popular to bleat about how backward Australia is, but for most people, higher speed options are here right now. Frustratingly, even though it’s available, most Australians are still paying for speeds under 1M, which is embarrassing. This is changing fast though, so hopefully 2010 will see most people wake up and move to a faster plan (or a better ISP!).

Wireless broadband and portability are obviously huge trends. Smartphones, specifically the iPhone, have changed the market completely in the past year. Right now, it’s complementary. Customers are using high speed, high volume fixed line solutions to their home, and taking mobile broadband with them for access outside the home.

Of course, as I mentioned above, with all this high speed, video applications start to become more practical. So 2010 is the year for IPTV to final make its debut in Australia.

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