Comindico customers stand firm

Comindico customers stand firm

After falling on hard times and into the hands of receivers Comindico's customers are standing by their IP network and service provider despite attempts from competitors to prize accounts away.

An all IP network backbone and wholesale service provider estimated by analysts to be worth between $350 million and $400 million, Comindico's board found itself opting for voluntary administration following the reported collapse of a renegotiation of a vendor finance deal with major equipment supplier and creditor Cisco Systems. The day following the board's move, McGrathNicol+Partners were appointed as receivers.

According to a statement from the receivers, Comindico will be offered for sale as a going concern as soon as possible with services to remain in place during the course of negotiations.

While Comindico may have lost the support of its creditors, its customers are standing loyal saying they do not anticipate any disruption of service even with the current situation.

Flight Centre CIO David Warner, whose business requires numerous, customer-facing Web portals and electronic transactional links with airlines, said while normal contingency plans remained in place, he would stay with Comindico.

"Comindico continues to have our full support. If worse comes to worse we are quickly and easily able to implement plan B," Warner said. Lismore-based (NSW) diary supplier and retailer Norco is also standing firm, with around 23 retail outlets using Comindico to deliver terminal services into regional areas.

Norco MIS Llew Hill-Lewis said he would stick with Comindico because it had delivered both a quality IP service and value for money for his company.

"It's business as usual for us. [Comindico] might have been a little bit ahead of its time, but we're very happy customers ... very pleased with the service. It has added value to our business. It came in with IP technology when our other solution was costing us an arm and a leg and gave us control over our branch network," Hill-Lewis said.

However, Hill-Lewis' generosity does not automatically extend to the state of competition in the network service provision game, which he feels needs more rather than less competition in terms of both quality of service and price.

"Comindico might have given some of the big [telcos] a run for their money. At the end of the day Telstra owns such a huge component of the plumbing. I don't know how much other people can afford to play in that space ... the numbers must be pretty frightening," Hill-Lewis said.

The Norco MIS added he had already been approached by Telstra and two other providers for his Comindico business but said running a regional network was as much about the performance and delivery as cost.

"The speed of the switch is vital. Price is competitive, it's what everyone does," Hill-Lewis said.

Meta Group infrastructure senior analyst Bjarne Munch said while Comindico's position was not a surprise, it did not reflect unhealthy consolidation in the Australian infrastructure marketplace.

"Their VoIP service was insufficient for what the market wanted. Selling MPLS (multi-protocol managed services) is quite difficult. Having the infrastructure in place is not enough," Munch said.

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