iiNet's OzEmail buy will boost faster broadband

Thousands more Australians will be set to benefit from broadband internet at up to 8Mbps once the acquisition of OzEmail by iiNet is finalised.

Presently 20,000 iiNet customers can have access to the 8Mbps service, launched this year. So far some 6500 broadband users have taken up the offer.

iiNet managing director Michael Malone says the issue right now is a logistical one. Enabling DSLAMs is not a problem. It is more about how you bill that to customers, he said. "We can't put that into the OzEmail billing system on day one."

The iiNet DSLAMs (Digital Subscriber Line Access Multiplexer) cover all of Perth and parts of metropolitan Sydney and Melbourne.

Malone said he predicted this billing conundrum to be sorted by the middle of the year. When that is done, it opens the possibility of thousands of people on the east coast to have access to the 8Mbps service.

"It is by far the strongest in the market. Nobody offers this," he said.

Apart from iPrimus which offers broadband at 6Mbps, no other ISP provides DSL download speeds faster than 1.5Mbps

iiNet on Tuesday announced its plans to acquire OzEmail for a total of $110 million, of which $105 million would be in cash. The deal is expect to be completed in 20 days

In additional to ultra-fast broadband speeds, iiNet will look to turning its attention to Voice over IP (VoIP) and plans introduce a VoIP service by May or June. Trials of VoIP among iiNet staff members commenced just before Christmas.

"We see broadband and telephony as converging," Malone said.

He said residential customers would initially need to have an analog telephone adaptor -- a device used to convert analog phone signals into digital data packets -- in their homes to make calls. But ultimately, iiNet's plan is for all of the digitising of voice from homes to occur in the DSLAMs.

He said the DSLAMs would deliver broadband, but when installed with dedicated equipment would be able to provide VoIP to a subscriber's house. "We have control of the copper line [to users' premises]," he said.

iiNet's acquisition of OzEmail brings to it many advantages. The main one is a brand, which it previously did not have, on the east cost of Australia. Malone said people in the industry knew iiNet, but most consumers did not.

The other main component is the scale iiNet obtains. iiNet is based in Perth and has a decent footprint in WA and South Australia. However, it has not been able to penetrate the east coast, until this acquisition.

After the completion of the acquisition, both iiNet and OzEmail will retain their brands.

The combined iiNet and OzEmail customer base -- which will be approximately 620,000 -- will put it in third place in the ISP market behind Optus and Telstra.

Telstra BigPond's corporate affairs manager, Craig Middleton, said it was good to see the future settled for OzEmail and its employees. "We look forward to competing with them, to the advantage of Australian consumers." Optus declined to comment.

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