WestNet has signed local modem vendor, NetComm, as the exclusive supplier of equipment for the national ISP’s ADSL customers.
NetComm directors are expecting the deal to boost the company’s sales by up to $3 million over three years, as the recent lowering of entry-level pricing for ADSL services increases demand for broadband and broadband-related equipment.
“WestNet is a major win for NetComm,” managing director, David Stewart, said.
WestNet was previously using products from D-Link, but began buying NetComm’s products in November last year.
“We configured our modems and routers especially for WestNet, which made installation easier for the end-user,” Stewart said. “This caused a huge drop in support call costs.”
The current broadband price war was not something that is impacting negatively on NetComm, he said.
“The reality is, the price of a modem is a one-off transaction, whereas the price wars are all about monthly charges,” Stewart said.
“Telstra’s move has certainly affected profitability for ISPs, but it has substantially increased take-up. So, we may have had to discount our prices slightly, but as volume goes up, our costs come down anyway.” WestNet currently has more than 50,000 business and residential customers, and is currently placed among the top 10 ADSL ISPs.
“In the past month, we have nearly doubled our sales,” WestNet managing director, Peter Brown, said. “We’re almost struggling to keep up with natural, word-of-mouth growth.”
The company recently expanded to the east coast, and is signing new resellers every week.
“We’re also looking at a major advertising campaign,” Brown said.
US research group IDC recently predicted that there would be close to 3 million broadband subscribers in Australia by 2007, or about 13 per cent of the population.