South Australian internet service provider (ISP) Tardis Telecommunications has told one of its aged-care provider customers that it will need to terminate internet services to hundreds of elderly people because the broadband deal it had put in place wasn't as lucrative as it had first believed.
Nurv Telecom, part of Tardis, told residents of aged-care provider Lifestyle SA in an email sighted by ZDNet Australia that internet services will be mutually terminated.
The internet service provider had resold cheap Telstra internet and phone services to seniors with hopes to gain enough subscribers to turn a profit.
The deal with client retirement housing provider Lifestyle SA crashed after the ISP failed to establish enough elderly subscribers to make its cut-rate services viable, according to Lifestyle SA spokesperson Roxanne Norris.
Only about 400 residents of 1500 signed on to the cut-rate service, well-short of the 700 to 1000 necessary to keep the cheap deal afloat. The services returned only some $15,000 a month, which wouldn't cover the estimated $40,000 in operating costs.
The retirement facility had encouraged adoption with free trial offers and computer hardware.
Tardis has entered talks with Lifestyle SA this morning and is also in discussions to strike a deal with Telstra, Norris said.
The retirement village invested about $1 million into fibre network infrastructure to connect residents across its 11 South Australian retirement villages to high-speed internet, according to Norris.
"It was just financially impossible to carry on. They [Tardis] now owe money to Telstra," said Norris.
"We aren't cutting off broadband. We may just need another carrier, although it may cost [residents] more because they were getting it for an unrealistic price."
Norris said residents may not have seen internet access as necessary.
"The last thing an 85-year-old grandmother wants is broadband. It's the wrong demographic."
Telstra will continue to supply internet access to Lifestyle SA residents for at least two to three weeks, Norris said.
Repeat calls to Tardis Telecommunications including customer and technical support have gone unanswered. Telstra refused to comment on the deal, citing confidentiality agreements.
The average age of residents across the11 South Australian retirement villages is 68.