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Home  /  geekspeak  /  What does iiNet's buyout of Internode mean?

What does iiNet's buyout of Internode mean?

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The local Internet service provider scene has been consolidating for a while, and it’ll be interesting to see whether the emerging national broadband network changes that to any significant degree; in theory an open access network that allows for new entrants could see the kind of explosion in providers that was seen back when dialup access was the best that any consumer could hope for. That’s theory for the future; right now there’s been a number of moves in the ISP world that’ll have an impact on everyone, whether you’re next door to the next NBN rollout spot or if it’s many years in your future.

The most recent shift in the ISP space has seen iiNet buying up a number of smaller players; last month it was Canberra-based TransACT, and just before Christmas it was announced that iiNet had bought out the highly popular ISP Internode. Internode and iiNet have long rated highly amongst the technorati for the quality of their service; both in the value of the plans they offer (and a number of similar freebies, such as free access to ABC’s excellent iView streaming service) and the after-sales support. The official word is that the buyout of Internode won’t result in any changes in the short term; iiNet will continue to run Internode as an iiNet “brand” — in much the same way as it does Westnet. That’s confirmed by Internode’s Simon Hackett, who’s written an excellent explanatory document — http://blog.internode.on.net/2011/12/26/q-and-a-internode-iinet/ — that states that Internode will continue as a brand and as it has done
“Providing that plans are sustainable in economic terms”. That’s quoting directly from Hackett, and it’s the key thing that anything to do with Internode rests on; it’d be unlikely that we’ll see no changes to Internode’s offering in the medium term simply because it’d be economically inefficient to do so, and I’m sure that if it became prudent to so, some of Internode’s offerings will become similar (if not identical) to iiNet’s. That doesn’t mean it will happen, but I’d be surprised if this particular acquisition didn’t lead to a little less variety in the ISP space.

So where does that leave Aussie consumers in terms of ISP choice? The obvious answer is that (at least technically) there’s a few less than there used to be, but that’s to a certain extent all just manoeuvring prior to the NBN becoming a fully fledged entity; once that happens the floodgates open for access, and clearly ISPs are all trying to get as large as possible before that happens. While the NBN does offer the possibility for smaller wholesalers, it’s in the extra capabilities and perks that ISPs can offer customers that they’ll sell well; Telstra for example has a number of contracts with sporting bodies for online rights to the AFL, and that’ll be a key thing to get customers on board both prior to the NBN and after it. Paying for those kinds of rights isn’t a cheap exercise, and it’s only the largest providers that are likely to be able to compete.

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