iiNet: investments pay off, backs the NBN

iiNet: investments pay off, backs the NBN

Investing in infrastructure and expanding product range working wonders for Perth-based ISP.

Investing in infrastructure and expanding its product range has helped Perth-based ISP, iiNet (ASX:IIN), compete in a near-saturated ADSL market.

According to a presentation to investors, iiNet has gain significant marketshare through increasing its number of active exchanges. It currently has about 350 active exchanges and is currently the second biggest ADSL provider behind Optus, according to the ISP.

This has delivered cost savings to iiNet as it’s is more expensive to service customers if they are not on the ISP’s own network. About 65 per cent of iiNet customers are now on-Net as of December 2010.

iiNet recently announced it was putting more ADSL2+ DSLAMs in a $10 million regional network upgrade project starting in rural NSW and WA.

With the number of brand new fixed-line Internet subscribers shrinking every year, iiNet has employed a strategy to retaining profitable customers and offering a range of complementary products as a way of differentiating itself in the broadband market.

Last year, the ISP launched its iiNet R&D Labs and released its first product, BoB Lite, in December.

iiNet also brought out its first Sim card-only mobile phone plans later that month.

“We have been preparting for this growing maturity in the broadband market by building scale and diversifying fresh territory like Fetch TV, mobile voice, Netphone and a new suite of innovative consumer products from our iiNet Labs to ensure long-term growth,” iiNet chief, Michael Malone, said.

The ISP also said it was to be one of the few to benefit from the National Broadband Network (NBN).

iiNet was pleased with NBN Co’s pricing structure, which was revealed when the NBN business case was released.

The ISP cited research from investment firm, Goldman Sachs, which claimed iiNet would not be impacted by the NBN prices but Optus and TPG would see a significant cost increase.

“Pricing should allow for low impact transition for existing [iiNet] broadband customers.

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Tags ISPiiNetADSLoptusNational Broadband Network (NBN)R&D Labs

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