Dodo CEO calls for unlimited as standard offering

The normally quiet chief executive of challenger ISP, Dodo, has called on the broadband provider sector to make a definite switch to unlimited plans once and for all.

Despite claims from iiNet chief executive, Michael Malone, that plans with an indefinite monthly quota were “dead in the water”, Larry Kestelman told Computerworld Australia the law of averages were in favour of moving all users to the unlimited alternative.

“I’m actually totally anti-terabyte plans,” he said. “As far as I’m concerned if you’re selling a terabyte plan, you might as well call it unlimited because there will be so few people who will actually use much more than a terabyte, and if you’re doing peak and off-peak, if they go over their off-peak quota are you going to throttle their service?

“The sector needs to go to unlimited and be done with it.”

Kestelman’s comments come as iiNet finalises its $60 million acquisition of AAPT’s residential customer base and prepares to axe the latter service provider’s popular unlimited 24/7 plan by 10 November, claiming subscribers had boasted of download up to 75TB since switching to the plan. The Perth-based ISP has maintained a few thousand of AAPT’s 113,000 base will be affected, while “most customers will just continue on as if nothing has happened”, according to chief regulatory officer, Stephen Dalby.

“It’s not like we’re going to cut anyone off or doing anything drastic,” he said at the time.

But Kestelman - who spoke to Computerworld Australia to defend his provider against other recent comments from Malone - admitted for the first time that Dodo’s 3TB plan, which is priced 5c per month below the unlimited alternative, was simply released as a “gimmick... just to show how absurd I think the whole idea of still offering multiple terabytes of data is”.

The ISP’s reliance on averages means that, while some users will take advantage of the unrestricted quota, others will sign up to the plan but download a relatively small amount, balancing the costs required to keep the plan afloat. Competing small ISPs such as Exetel have been known to terminate “unprofitable customers” in an attempt to retain a margin on plans, but Kestelman said users on the Dodo network were able to do whatever they want.

While he conceded data use on the network was “extraordinary”, Dodo’s chief executive said he was unwilling to make any changes to the ISP’s popular plan.

“You run the averages; we’re here to stay with our unlimited plan,” he said.

“I can’t speak for the entire ISP market; I certainly think people who haven’t got the right volume or the right mix of people might find it difficult but all I’m saying is that we’re dealing with it just fine and we’ve got very happy customers, and customers complaining that they can’t find enough stuff to download.

With 130,000 DSL and 170,000 mobile broadband subscribers on its billing system, Kestelman claims Dodo is the largest private ISP in Australia, while he is a self-proclaimed ‘Leader of the Opposition’ in the ISP sector. Despite issues regarding customer service, along with tussles with the Telecommunications Industry Ombudsman and Australian Competition and Consumer Commission (ACCC), the provider has moved beyond telecommunications and broadband into reselling electricity and back-to-base security monitoring systems.

The provider resells DSL access predominantly over Telstra and Optus wholesale networks and offers the unlimited plan across all DSL-enabled exchanges from the telcos. Kestelman ruled out plans to build its own DSLAM network in the steps of major competitors, and disregarded claims by other providers that Telstra was discriminatory in its retail and wholesale broadband pricing.

“I think we’ve been a loyal customer to Telstra,” he said. “For that specific reason we haven’t rolled out a network of our own, we hope they’ll support us better across the board. I actually don’t know if they are or if they’re not - for all I know I could be paying the same as [Internode general manager], Simon [Hackett].”

Dodo has also engaged in talks with NBN Co around trialing the fibre-to-the-home (FTTH) network in the first five mainland release sites expected to become operational early next year.