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ISP service crash

Rationalisation in the WA Internet service provision industry has resulted in poor service to some WA Internet users.

The Australian Competition and Consumer Commission is keeping a close eye on ISP mergers and acquisitions.

While not currently taking action against any ISPs, the ACCC is actively examining service standards of merged companies under the Trade Practices Act.

WA’s largest ISP, iinet, has been fending off claims of bad support service.

iinet’s acquisitions of smaller ISPs has led to claims the company is more concerned with being a publicly listed monolith than with its core service.

Vianet managing director Tony Broughton said the decrease in

service levels became apparent during the past five months.

“I suppose, because iinet is the biggest ISP in WA, it’s more obvious when they drop the ball,” Mr Broughton said.

“Listing on the stock exchange is a big step for a company to take and, combined with a large number of acquisitions, support service levels have declined.

“We have acquired many new clients who have jumped ship from iinet for these reasons.

“Former long-term clients of Wantree and Omen were used to very good service and they are noticing it the most.”

Mr Broughton said iinet seemed more concerned with chasing new clients than providing adequate help desk staff.

Personal assistant to iinet managing director Michael Malone, Debbie Wilson said the company had been “in a bit of a tizz” early in the year when it received greater than normal demand for support services.

“January and February were tough months – we were swamped by calls and busy with the acquisitions,” Ms Wilson said.

“This period is usually quiet, so we were caught a bit off guard.”

Ms Wilson said staff levels had risen so much due to acquisitions it was hot-desking four staff per desk over a twenty-four hour day.

Mr Malone said the company had three separate levels of customer service including around 100 people on the help desk, fifteen technical experts in the advanced support division and twelve project managers to deal with long-term problems and significant projects.

He said only 17 per cent of frontline queries needed to be dealt with by advanced support staff.

“Our client base has risen from 20,000 to 50,000 in the past 10 months,” Mr Malone said.

“On average, we get about 2,000 calls a day – our people live for these calls.

“We’ve had minimal to no attrition from former Wantree clients.

“One of the small ISPs we acquired had 60 different plans on offer to 150 clients.

“We moved them to the closest plan we had, but lost 50 per cent.

“Some of these people were used to being able to pick up the phone and deal direct with the owner, which is something they don’t get with us,” he said.

Formed in 1993, Iinet began acquiring small ISPs in 1997.

“Most of those were businesses that were in trouble – in the first instance I’d say we rescued the users from the administration,” he said.

Since listing on the ASX in September, the company has acquired eight smaller ISPs.

Mr Malone said the acquisitions were a necessary means to remain viable in an increasingly competitive industry.

He said as smaller ISPs fell by the wayside, the big had to get bigger to survive.

“Omen and Wantree were highly successful and respected businesses and we put it forward to our customers and the industry as a merger, and that’s largely because that is the way it was viewed by the staff and the owners of those businesses,” he said.

“At the end of the day, no-one can force you to sell your business.

“We’re a profitable entity so we make a fair market offer to them and they make the decision as to whether they want to go with us or continue as they have done – I can’t see any way that we have put pressure on people to sell.

“A good example is Wantree who recognised they didn’t have the size or the mass to be able to compete in the future.

“Iinet is in the same boat – we were caught in that horrible middle ground where you are large enough to have all the overheads of a large company but too small to enjoy the economies of scale.

“Our real competitors are Telstra, Optus, OneTel and Primus – they’re the big guns.

“We’re not planning to get so large we can swallow up all the small guys.

“Our intent is to get to the size where we can compete with larger ISPs like Telstra and survive.

“Iinet employs 150 people in WA – I’d like to keep on employing those people and more in the future,” he said.

Mr Malone said anyone dissatisfied with their ISP’s support service should consult the telecommunication industry ombudsman.

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