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Crazy time to launch an ISP?

With the continuing consolidation of the Australian telco industry, it's a big gamble to start a new ISP, even in an NBN world.
Written by Phil Dobbie, Contributor

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With the telecommunications industry rife with takeovers and mergers, is this really the best time to be launching a new internet service provider (ISP)?

That's precisely what Rob Appel is doing. Next month, he launches Australian Broadband Services, a service provider focused on offering services based on the merits of the National Broadband Network (NBN). He reckons that the launch of fibre will encourage many customers to start looking at which companies are available, rather than sticking with their existing providers.

There's no doubt that it's an opportunity, but will he be able to match the bigger players on price? The approach is based on buying in wholesale services, rather than investing in infrastructure. That provides flexibility, but will it squeeze margins too much to be sustainable?

Graeme Dollar is certain that the mass marketing of broadband is not the future direction for voice over internet protocol (VoIP) provider Engin. He is the COO at the Seven Group Holdings business, which, he says, will focus on SMEs — a segment that has had its take-up of VoIP and associated services held back by the limited availability of reliable connections. The NBN fixes that problem, and opens the floodgates for VoIP providers.

With all of the uncertainty around the upheaval created by the NBN, it's anyone's guess as to whether either strategy will be successful. In fact, they need to make it to the start line. Rob Appel will need funding to get his business off the ground, and Engin is rumoured to be up for sale.

Are these companies heading in the right direction? Leave us your thoughts on the Twisted Wire feedback line: 02 9304 5198.

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