Dodo prepares for life in a post-ISP era

ISP eyes future as household services business

The Australian Internet service provider (ISP) market has continued to go through a process of consolidation. Figures released by the Australian Bureau of Statistics in October 2012 revealed that the number of 'medium'-sized ISPs — those with 1000-10,000 customers — dropped 25 per cent in the space of a year. ISPs with more than 100,000 customers dropped from 10 to eight in the same period.

From the point of view Larry Kestelman, that ISP market consolidation is not something to be fearful of — at least for the company he sits at the helm of, Dodo. Dodo's CEO says his company has been "very much the winner of the consolidation in the market".

"We're an organic growth business, and the less brands that there are out there on the frontline, I think Dodo benefits out of the lessened competition without a doubt," Kestelman says.

"We're a frontline brand, and the less brands and brand noise out there, it's a plus for us."

Dodo has experienced "significant growth" over the last two years, Kestelman says — just don't describe the company as an ISP.

"I don't like the term anymore," he says. He doesn't like to describe Dodo as a telco, either: "We're a customer service business."

"We've diversified," he explains "We're not a one-product shop, which a lot of the people that have either disappeared or have been acquired [were]."

This diversification began with Dodo offering household electricity, then, in, 2012, household gas supply, and more recently the company has begun selling car and home and contents insurance. Power and gas are "absolutely" part of Dodo's core business Kestelman says.

"The way we look at ourselves, we don't actually look at ourselves as an ISP or a telco, we're almost an enormous big buying group," he says.

"We have a large number of customers, and we can on their behalf go and get a good deals on other products that we feel are relevant. Then it's our job to support the customer."

"Without a doubt" the company will look to expand its household service offerings, the CEO adds.

"My team is pretty well stretched with dealing with the ones I've got," he says, but he sees potential in expanding to financial services, including perhaps mortgages.

"We're a service business, so people will call us for convenience, for trust. We have a brand, we have these systems and processes, and from a differentiation point of view, if you want to deal with one brand for all of your household needs, well we're the people."

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