Sales of NZ ISPs reflect changing market

Two New Zealand Internet service providers (ISPs) have been sold, and the new owners have set their sights on expanding both services from their local markets to the national market.

Actrix Networks, which has been running in Wellington for 12 years, has been bought by one of its employees, Hal King of Wellington. Compass Communications, a wholly New Zealand owned telecommunications carrier founded in 1995, has bought Auckland's AIX (Auckland Internet Exchange).

Both intend to expand nationwide. King says that the economic viability of some community ISPs is already being affected by an open market and he predicts many more will be hurt over the next year. "I am determined that Actrix will not be a statistic," he said.

King intends making Actrix a national provider of Internet services to both the private and commercial sectors.

He says ISPs have to take imaginative steps to protect their market share or risk being run over by the leading players. He says it's time for the second wave of entrepreneurs and investors to "take up the challenge" and advance the industry through its next stage.

Actrix will offer all the traditional products and services, but specialise in some existing and new products, King said. The company has 15 staff. Their jobs are all safe. although some positions will be restructured.

AIX has been providing services to Auckland for more than three years and hosts the Site Of the Day Award (SODA).

Compass chief executive Karim Hussona says Compass over the next two years will take the ISP from providing a regional service based in Auckland to providing a nationwide service.

It will concentrate first on the areas where it has an established network -- Auckland, Hamilton, Tauranga, Wellington, Christchurch and Dunedin -- before moving out to other main centres. Hussona says the company intends to invest heavily in the Internet.

However, smaller ISPs Computerworld spoke to don't believe they will have to go national in order to survive. New Plymouth-based Taranaki Net Source director Grant Pease believes that regional ISPs have a local advantage. "There are a lot of people who like to support a local business, based in their community," he said.

Pease says many people also like to be able to visit their ISP if they have a problem, or have a representative come and see them.

Invercargill-based South Net, having already stretched into Otago and Te Anau over the past few years, is currently gearing up to provide a service nationwide. Although it will be able to do this by the end of this month, and will have clients in Auckland and Wellington, the ISP will not be marketing itself as a nationwide provider.

Managing director Wayne Shiesselbein says the expansion is not critical for survival. "We don't have to grow to compete in that market."

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