ispONE renews Telstra wholesale deal, flags move into retail - UPDATED

Stuart Corner
Thursday, 06 August 2009 12:42

IT Industry - Strategy

'White label' wholesale Internet and telephony services provider, ispONE, has renewed its contract with Telstra Wholesale for ADSL and telephony services, and says it is planning to move into providing retail services.

(this article has been uptated to correctly represent ispONE's MVNO relationships)
ispONE said the deal would ensure that it can meet the expected rise in wholesale volumes to 2014. ispONE director, Zac Swindells, said: "We have experienced our strongest year to date with approximately 75 percent revenue growth, and as new ISPs enter the market and as our existing customers capture greater market share, we will see wholesale volumes continue to increase in the next five years."

He added: "ispONE provides white label wholesale to more than 150 of the 600 existing Australian ISPs and the agreement with Telstra Wholesale will allow us to meet future demand."

The company has had telephone service and ADSL resale agreement in place with Telstra for several years, and added ADSL+ services in January this year. It became an MVNO on the Vodafone network in 2007 but has since discontinued the relationship and in March this year signed a deal with Optus to resell its mobile services, inlcuding mobile broadband.

In an Internet industry profile published in June market analysis company, Datamonitor predicted that by 2013, the Australian internet access market would be worth $2.1b, an increase of 14.6 percent from 2008. Datamonitor predicted the number of subscribers to rise to 8.8 million by the end of 2013 an annual compound growth rate of 2.8 percent from 2008.

However, Swindells told iTWire that "we see consolidation in this industry," and that to protect its revenue ispONE would be making acquisitions and entering the retail market. (If acquired by a larger ISPs with their own infrastructure, an ISP wholesale customer would no longer require ispONE's services).

Swindells said the first acquisition would be announced in a matter of weeks, with another larger one to follow. He told iTWire that these businesses would be operated at arms length from the wholesale business by a new retail subsidiary on exactly the same terms as made available to other service provider customers.

Swindells added that the company was also looking at the going public towards the end of 2010.