SINCE late 2000, the size and scope of Australia’s Internet service provider market had changed markedly.
Industry consolidation has resulted in a steady decline of the number of players, particularly at the smaller end of the market.
However, as the market matures a clearer picture of the key players is emerging – and four of them are home grown WA-based ISPs.
iiNet, WestNet, Swiftel and Datafast have not only stayed afloat through difficult times but have continued to battle for market share with the big players.
Pin-pointing the exact position of WA ISPs in the national ladder is not clear, however, analysts and the ISPs themselves agree that the four sit somewhere in the top ten.
The largest of the four is iiNet, which is thought to be ranked third after BigPond and Optus with others in the ten including the likes of Primus, OzEmail, Internode and Netspace.
“When you look at the national scene four of them are in Perth,” iiNet managing director Michael Malone said.
“We don’t see that in any other city.
“There were more ISPs in Perth than in Sydney at one point.”
Mr Malone said it was unclear why WA ISPs had survived and achieved growth in the national scene, but he suspected customer service and WA’s entrepreneurial spirit played a big part.
IT&T analyst Paul Budde said WA ISPs had exploited the opportunities ignored by Telstra.
“The reason that WA [ISPs] are so successful is because … Telstra long ago abandoned WA.
“It was easier for WA-based companies to creep under the radar. You couldn’t have done that in the eastern States.
“It’s a back door approach, but WA companies have been successful at expanding to the eastern States.
“WA is also an entrepreneurial State. It’s far more self-reliant and I can very clearly see a ‘can do’ attitude – that down to earth approach that got things done.
“The other interesting development is that the Internet has changed from dial up to broadband.
“That’s where the next battle ground is, in establishing commercial viability.”
Mr Budde said WA ISPs had quickly tackled these new areas of the market.
Research program manager for IT analyst group IDC, Landry Fevre agreed customer service had provided a basis for WA ISPs to grow.
“The difference is that WA ISPs are close to their customers,” he said.
“They are very community based.”
Mr Fevre cited iiNet as an example of a company that acquired small ISPs as part of national expansion plans but had kept the ‘ISP spirit’ of customer service.
“It’s a tough market. WA has done very well,” he said.
iiNet last year completed a series of acquisitions across the country and merged with New Zealand’s iHug, boosting customer numbers by 17,000.
Datafast, which owns the EFTel brand is also on the acquisitions trail having snapped up two eastern State’s based ISPs earlier this month.
Swiftel recently completed a reverse takeover with eastern State’s based PeopleTel.
Meanwhile, WestNet’s customer numbers have consistently grown each month.
WestNet managing director Peter Brown said customer service and a supportive business environment had contributed to WestNet’s growth.
“This community has traditionally been supportive of local companies that in turn look after them,” he said.
“We had the time and the opportunity to build a good reputation in the environment of relatively low competition.
“Eastern States ISPs generally start up in a viciously competitive environment that big established players such as Telstra, Optus, Ozemail & Primus are working away at, so there’s no room to get established, develop quality support, strong internal systems, and a sound network.
“All they can do is compete on price from day one, which creates an environment that those critical quality elements simply can’t grow in.”
