iiNet is making a play for the mobile phone service market with plans to launch its first stand-alone mobile package next month.
Chief executive David Buckingham has also declared the company has no interest in purchasing infrastructure such as that held by Amcom, despite the interest in the Perth market from east coast companies Vocus and TPG Telecom.
During the company’s annual general meeting this morning, chief executive David Buckingham revealed that, from December 2, iiNet will offer customers mobile packages as a single product offering.
Previously people were only able to buy mobile plans if they had a broadband service with iiNet.
Mr Buckingham said it had been a lengthy decision-making process but the company had justified the cost of providing the service and returns made, despite not owning a mobile network.
“Over the past two years we’ve worked really hard to understand supporting the product and bring that support cost down to a level that makes it easier to support now than our fixed line services,” Mr Buckingham told the AGM.
“We are able to make a good enough service where we’re able to make an incremental margin over and above our base products to [firstly] provide a service and [secondly] go after growth.
“We’re finding our customers want to take our service outside the home - we’ve got to be there to provide it.
“We’ve got 950,000 customers and there must be at least two mobiles in each of those homes, you’ve got to think about that scale and opportunity.”
Last week, iiNet launched the iPhone 6 as its first Apple product available on mobile plans.
Mr Buckingham said 1,000 units sold in the first day, which clearly demonstrated demand for mobile services.
Mr Buckingham also told Business News that iiNet had considered making a play for fellow Perth telecommunications company Amcom Telecommunications, but had ruled it out at this stage.
East coast companies Vocus and TPG Telecom have made their interest in Amcom clear, with both buying up shares in the company.
Negotiations are still ongoing between Amcom and Vocus.
Industry analysts had indicated iiNet could also throw its hat in the ring given that it didn’t own fibre infrastructure allowing it to service corporate clients.
However Mr Buckingham said iiNet was comfortable focusing on the small-to-medium business sector with staff below 250 employees.
“If you’re playing at the corporate and government end … you won’t be able to compete against Telstra’s bid for that business unless you own the fibre that they’ve got running down the street - we don’t have that fibre,” Mr Buckingham said.
“We’ve always been comfortable with renting somebody else’s either copper line or the NBN when it comes … and we’ve also build our national network off, effectively, rental agreements because there’s competitive supply out there.
“So, yes we’re in telecoms, but we’re not in the kind of telecoms that Amcom and Vocus are in.”
