Internet service provider Netspace has launched an ADSL offering designed as a natural migration path from either ISDN or dial-up Internet access.
The service, which accesses Telstra's wholesale ADSL network, has been launched in major cities such as Sydney, Brisbane and Melbourne as well as Hobart and Launceston. In coming weeks Adelaide, Perth and Canberra will also come on line. Managing director Stuart Marburg said the company is pushing the service to the borders of urban areas, with businesses in the outer Melbourne suburb of Sorrento already signing up.
Marburg believes ADSL will be very popular with existing users of ISDN services, who pay sums of around A$200 per month with always-on connection and data costs included. Netspace's ADSL services begin at $87.50 per month, well under half of this cost. "Up until ADSL, the only product that wasn't ridiculously expensive was ISDN," he said.
Marburg also hopes to capture a share of the business dial-up market. He believes dial-up connections will become a thing of the past when people trial ADSL and find it as attractive as he does. "Even on a home dial-up, if you check e-mail or surf the Web three of four times a day, you are paying around $1 in phone calls, which adds up to around $30 a week, plus line rental of around $15 a week, and your Internet account is on top of that," he said. "ADSL can run across the same line as your telephone and for an extra $30 or $40 you can have traffic and a faster connection. ADSL becomes a feasible alternative."
Being a reseller of access to Telstra's cables, Marburg was recently concerned to read an article in ARN which claimed Telstra was charging its wholesale customers (ie other ISPs) the same rates as its own retail customers.
"If this proves to be true, it concerns me," he said. "But our prices are comparable to Telstra, in some cases even cheaper."
When asked if he was satisfied with the margins Netspace is able to make on the Telstra wholesale plan, Marburg added that, as a businessman, he is always looking for better margins and is never satisfied. He is confident the pricing he has set for Netspace's ADSL services will be popular. In any case, Netspace will offer flexible pricing plans and value-added services to differentiate itself from Telstra's retail ADSL offering.
"Customers will pick a product for their needs," he said. "It comes down to what and who you're comfortable with."