Eisa defends PC bundles

Eisa defends PC bundles


On the back of retrenchments in its call centre, Internet player Eisa has responded to industry speculation it is struggling to attract subscribers with its bundled PC/Internet offering.

According to forecasts in the Eisa prospectus, the ISP is required to achieve 200,000 Internet subscribers by the end of this year. At the time of the float, Eisa was estimated to have 60,000 subscribers.

When contacted by ARN last week, Eisa managing director Damien Brady acknowledged that sales of the bundle `have not been as great as we thought they would be'.

But he dismissed any suggestion of scaling down the operation. `We have done some rationalising and put our call centres in Melbourne together, which has resulted in the loss of six jobs.' He claimed that this could barely be seen as scaling down the operation when the combined call centre comprises 140 staff.

Eisa has had a tumultuous introduction to life as a public company, voluntarily suspending trading on the ASX for a week last month over speculation about a possible purchase, but the burning issue has been about getting new customers, a major point of interest for its stakeholders.

Eisa has established two retail beachheads for its PC/Internet bundle, partnering with the giant Tandy and the up-and-coming Strathfield Group.

Tandy Australia marketing director Robert Hayes described the relationship with Eisa as `good', although not the same as that enjoyed with Telstra and Optus as ISP providers or Packard Bell and Compaq as PC suppliers. Hayes pointed out that, as a national retailer, Tandy required its ISP partners to have maximum local points of presence, and mentioned some areas where Eisa could not provide local connections for Tandy customers.

`The Eisa PC and Internet bundle is a viable addition to our range and a staple part of our diet . . . We are due to review the relationship next month.'

Hayes was critical of some inflated claims being made about volumes of the so-called cheap PC and Internet bundles. `We're not doing the volumes [of the Eisa bundle] we were doing initially, but this is partly because other brands and Internet offers have added some confusion,' he said.

The other major retailer promoting the Eisa bundle is the Strathfield Group (SGL). Andrew Kelly, SGL's managing director, described the partnership as `a good deal for Strathfield and a good deal for them [Eisa], attracting a wider demographic to our stores'. Another positive of the arrangement, according to Kelly, is the fact that they carry no stock, and each store has been supplied with display units. The bundled packages are generally delivered and installed within three days of placing the order, he claimed.

And Strathfield's IT products manager, Paul Gleeson, was bullish about the product. `We didn't have any outlandish expectations, but we weren't fearful of the market.' Gleeson said sales of the Eisa bundle are steady and the company is generally happy with the service provided.

Another senior Eisa executive claimed that while it has been slower then they had hoped, the company is `on track' to achieve its subscriber targets. While he described the bundled deal as an important plank in the product offerings, he indicated that the required growth would also come from acquisition.

`The bundled product is not going to go away - there is a demand for it,' he insisted.

. . . and Edge remains upbeat despite closureEisa supplies one of Australia's biggest PC assemblers, Edge Technology, has also refuted any suggestions of business contracting, after it closed one of its Australian offices last week. The eight staff members at Edge's Northmead sales office in Sydney's west have been transferred to the Alexandria headquarters.

According to Emily Ballantyne, general manager of Edge Technology, `We wanted to centralise our distribution. It's just simply a result of a cost analysis, and we thought it made good management sense.'

Edge supplies Eisa with PCs for its Internet bundle, but is also pursuing other sales channels. Ballantyne claimed that the KTX Premium range, which was launched towards the end of last year, was going very well. `We're supplying a number of large retailers and we have recently got on a few government PC contracts,' she added.

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