Optus gets naked with iiNet and others, what now Telstra?

Stan Beer
Monday, 02 March 2009 15:43

Opinion and Analysis

Competition in the Australian voice and broadband market just got a lot hotter with Optus announcing a naked DSL service running at ADSL2+ speeds, meaning customers can now take out a broadband DSL plan without having to pay an added PSTN telephone line rental charge. Optus, Australia's second largest broadband provider, joins the number three ISP iiNet and a bevy of smaller providers now offering naked DSL plans, putting further pressure on Telstra's PSTN business.

Optus differs from other naked DSL providers iiNet, Internode, GoTalk and Exetel in that it has its own substantial PSTN voice business. So unlike the others which offer bundled VoIP services that compete directly with the PSTN, Optus has bundled its naked DSL offering with its mobile phone service.

For Optus the move makes sense because it enables the company to go after the growing number of consumers that are not bothering to subscribe to fixed line telephone services, preferring to only use mobile phones for voice. It also gives Optus an out from offering a cheap VoIP service that would compete with its more expensive PSTN service.

The Optus plan is pitched at three levels starting at $50 per month for 7GB download limit, $60 for 15GB and $100 for $30GB, including free modem and setup, with all plans on a 24 month contract and bundled with a post-paid mobile phone service.

If the mobile phone service is not wanted, the user has to pay $248 for the modem and setup, as well as an additional $10 a month for their naked DSL service.

Consumers who don't intend to subscribe to Optus mobile services could probably find better value elsewhere, such as GoTalk or iiNet, which provide the added benefit of well priced VoIP services.

However, for what is likely to be a significant proportion of the more than 7 million Optus mobile subscribers who don't want a fixed line service the chance to get a reasonably priced DSL plan sans line rental for nothing up front is likely to be attractive.

If the new Optus naked DSL offering has a weakness then it's the plans seem to be a bit light on the monthly download limits. A maximum of 30GB probably wouldn't satisfy a heavy downloader and certainly not at $100.

However, at least Optus is out there playing in the naked DSL space, which leaves Telstra as the only heavyweight ISP that requires DSL broadband users to rent a telephone line whether they want it or not.

Given that Telstra has more than 9 million mobile phone customers, many of whom like their Optus counterparts have no need for a fixed line service, the question remains as to whether Telstra can afford not to join the nudist colony and get naked.