ISPs key to NetComm success

ISPs key to NetComm success

ASX-listed NetComm has reported a 70 per cent rise in net profit for the financial year. It made $1.9 million on revenues of $23.9 million.

Managing director, David Stewart, said the company was now supplying ADSL equipment to 13 of the country’s top 20 ISPs.

A maturing market had also been a factor in recent successes, he said.

“The market is all moving toward broadband devices and over the past four years we have been moving the whole product range in that direction,” Stewart said.

ISP customers wanting to bundle hardware with their connection to attract a customer base were the fastest growth area of the business, he said. While NetComm had up to 100 ISPs currently on its books, according to Stewart, leading partners included iPrimus, Netspace and People Telecom.

“ISPs have gone from very little business in January 2003 to fairly significant business now,” he said. “Many ISPs are coming out with value offers of an ADSL modem with a contract to get customers connected, but we are seeing a lot of secondary sales of routers, firewalls and switches."

Slightly more than half of the company’s sales were currently broadband-orientated, Stewart said, with the balance made up through NetComm's legacy dial up-modem and network card range.

“We’re still selling the same number of modems as we used to, but some of the prices have come down," he said. "Dial-up modems will become a lesser component of our business year-on-year.”

While on the decline, dial-up modems would continue to be part of the business, Stewart said, as industrial and commercial applications, such as for automatic teller machines, still relied on narrow band technology.

An ability to customise products to customer requirements also played a role in this year's results, he said.

Hotspot sales were also a growing part of the business, with revenue expected to grow to $2 million over the coming year, Stewart said.

“Hotspots over the coming years will become a major part of the business, but there aren’t enough around at the moment to be a wide spread application,” he said. “As more people get wireless notebook and PDAs the expectation will be that can be used anywhere, so more will be installed and used.”

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