There isn’t much consolidation left to be done in the fixed-line broadband market and it is too late now to become a national ISP thanks to the National Broadband Network (NBN), according to Internode managing director, Simon Hackett.
He was speaking at the Communications Day Summit in Sydney.
At the end of last year, South Australia-based Internode was acquired by iiNet. Both ISPs have had a long history of having achieved high customer satisfaction rates and this was cited as one of the reasons to join forces.
With the acquisition of Internode, iiNet became one of the undisputed “big four” of the ISP industry. Telstra, Optus, TPG, and iiNet now have roughly 90 per cent of the entire fixed-line broadband market base.
Hackett noted consolidation in the ISP market, where larger companies are snapping up smaller players to build scale, has been fast-tracked in recent years. We are now in a “post-consolidation” period as most companies know the NBN favours larger ISPs, he said.
“There isn’t a whole lot of industry left that hasn’t been consolidated in the fixed-line realm - that has happened in a hurry,” Hackett said. “There isn’t much national consolidation left to happen.”
This means there isn’t much hope for those that are considering a future as a national ISP, he said.
“... It is too late, in my view, to become national from scratch and if you do become national you will be doing it essentially by reselling one of the other four guys’ products,” Hackett said. “But for regional players, they are perfectly sustainable.
With the fixed-line broadband market now over-saturated, ISPs must focus on offering services beyond just facilitating Internet access, according to Hackett. Having a mobile strategy and bundling services will be a big part of competing once the NBN is widely available, he said.
Hackett also criticised the Government’s NBN anti-cherry-picking laws.
The Communications Day Summit continues.