Wireless Internet access provider Azure Wireless has partnered with ISP iPrimus to launch its services at more than 50 venues in Melbourne.
Azure, which has $50 million in venture capital funding, was formed in January 2001 and is headed by David Gold, the founder of ill-fated online retailer dStore.
The company is banking on a business model that sees it focusing on building wireless networks while leaving customer procurement to ISP partners.
"It is a true wholesale model," Gold said. "We have priced [the service] so that there is a good margin for our reseller partners."
David Taylor, Azure's director of sales, said that he is thrilled to have iPrimus as an ISP partner but conceded that the key to success for the business will be to get Optus or Telstra on board.
"We need to get one of those big ones," Taylor said. "We have iPrimus, which has over 450,000 accounts, and we are talking to quite a few of the tier-two ISPs as well."
Taylor said that Azure Wireless does not want to make the same mistakes as some previous wireless players in trying to build the network and acquire the customers. "By having a wholesale model, customer acquisition has already been taken care of," he said. "Our objective is to build the best network in Australia and have quality venues where customers can gain wireless access."
The first 50 venues were launched on October 1 and the plan is to have more than 200 by the middle of next year by adding "hotspots" in Sydney, Brisbane and Adelaide, and adding more sites in Melbourne.
Taylor said that ISPs wanting to resell the wireless services offered by Azure are faced with little up-front costs. "The only cost for ISP partners will be in educating their customers about the access points," he said. "There is real value for ISPs in being able to offer additional services to their customer bases."
Azure is prepared to concede that there may not be a critical mass of wireless-enabled users at the moment, but all the research indicates that there will be in the future.
"New products are increasingly being fitted with wireless connectivity as standard and we are partnering with leading retailers to help further promote the sale of the wireless network cards," Taylor said. "In the future, if a customer's existing ISP doesn't offer a wireless connection service, they will shift their business to one that does."