Broadband bundles connect with retail

Broadband bundles connect with retail

In a significant boost to the broadband cause, star retailer Harvey Norman is set to launch a broadband modem and services bundle believed to be the first such offering to make it onto mass merchant shelves.

For the first time, home consumers and small enterprises will be able to wander into a mainstream retail outlet and pick up an ADSL modem and walk out with a service contract and installation appointment from a single purchase.

Harvey Norman will be selling Alcatel's "Stingray" USB DSL modem bundled with one of three ADSL connection plans from service provider iPrimus, which will use third parties to do installations. The deal was put together by distributor Quadtel.

It is believed the initial order from Harvey Norman commits the retailer to 1000 modems, which will be sold through selected stores on the eastern seaboard.

According to John Slack-Smith, Harvey Norman's general manager, computers and communications, selling a broadband bundle is "very much a strategic positioning" for Australia's largest retailer of IT.

"It has always been an important part of our strategy to have leading-edge technology," Slack-Smith said. "We think that the services and flow-on opportunities from broadband take-up should be significant for retailers such as Harvey Norman."

Slack-Smith said he was unaware of any other retailers that are offering such a bundle and he is happy for Harvey Norman to be once again "taking the high ground" on a new technology opportunity. He said the bundles will be on the shelves of selected Harvey Norman stores "within six weeks" and will be supported by television and press advertising as well as being placed in the next Harvey Norman catalogue.

Ash Chopra, general manager of Internet service provider iPrimus, also said it was a "significant" development for the broadband industry. He was chuffed to have this bundle available through such a prominent channel.

"Harvey Norman has not been a key partner for us before so it is great to see them on board," he said.

Chopra said the iPrimus service gets coverage to "90 per cent" of Australia's population through a hybrid of its own network and leased Telstra lines.

"We are pretty excited about this deal because HN is well prepared to support customers of broadband," he said. "They are a trusted name and I think with them on board a lot of people will get educated about broadband."

Chopra said "there are still a lot of questions outstanding" about broadband in Australia, but at least the industry has now found a mass merchant to "champion the concept" and do some serious marketing for the technology.

"Sadly, broadband take-up in Australia has been slack and most of that is because of the cost," he said. "This is a significant first step towards reducing the cost of broadband and improving the ease of connection."

Chopra said once broadband retail packs start appearing it will be only a matter of time before PC assemblers start offering products with built-in DSL modems, as in countries where broadband is more commoditised.

"In the next 12 months we will start to see the market grow and the hardware manufacturers will then warm to the cause."

Rod Orrock, CEO of Quadtel, which brokered the deal, said he was "thrilled to have been able to put together such a bundle".

"The access that [Harvey Norman] has to the SME and home consumer marketplace is huge," Orrock said. "That we have been able to put a broadband bundle together for them first is fairly significant for our plans to sell broadband through retail outlets.

"The encouraging part is that we now have a product that retailers are embracing. Harvey Norman has obviously been getting a level of demand in its space and was therefore keen to be selling this sort of bundle."

Orrock said once the deal has been trialled through Harvey Norman, Quadtel will be looking to have a similar deal available to other mass merchant, specialist and independent retailers.

Harvey Norman's Slack-Smith said that broadband is a key technology for his company because of the flow-on effect it will have to other sales.

"If you take it to the next step, high-speed Internet is going to be a technology that drives a whole lot of other things and that is going to be a real benefit to retail," Slack-Smith said. "People will then need more disk space, they'll want faster processing, and digital imaging will become a whole new ball game.

"Users are able to do a whole lot of new things and that will drive sales of hardware and applications."

Slack-Smith said there will be three different ADSL deals on offer with the Alcatel modems. The deals will sell for "under $400" and will include the first month's service charge. For $79 per month, consumers will get a 1GB limit at 256Kbps (download) x 64Kbps (upload). For $99, there will be a 3GB limit at 512 x 128. Speed can be boosted to 1.5Mbps x 256Kbps on the $159 plan. All modems will be sold with an 18-month iPrimus contract and a connection service.

Rival broadband vendor D-Link said it was also close to finalising broadband deals with five ISPs and numerous retail partners though its distribution network.

D-Link's marketing manager, Maurice Famularo, said it would "probably kick off with Harris Technology first" before being available to a full range of large and small retailers.

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