iiNet are buying Internode. iiNet has spent years scouring the country to buy up any smaller ISP they could to expand it’s subscriber base. For years the company didn’t even advertise. This strategy for growth, proved to be a winning formula, growing rapidly to be the 2nd largest ISP in Australia.
Today iiNet have announced they are acquiring Internode’s 190,000 customers. Internode customers are some of the most passionate out there and have been quick to raise their concerns. Known for their high levels of customer service, gaming servers and unmetered content deals and leading the way in IPv6, Internode customers are clearly concerned the good days are coming to an end.
The acquisition of Internode will cost iiNet $105 Million and contain more than 450 employees. It’s interesting timing for the purchase given the impending transition of customers from ADSL to NBN over the next few years. The deal is scheduled for completion by February 29th, 2012.
With a high profile acquisition like this, there is bound to be some anxiety, iiNet CEO Michael Malone attempted to address this in the press release by saying Internode would continue to operate independently. Unfortunately the facts are often skipped over in people’s rush to predict the move a failure and bad for customers. He also said the two companies had similar backgrounds, similar values and similar service ethics.
In reality, the acquisition is likely to benefit both iiNet and Internode customers as the joint infrastructure can now be shared and optimised, hardware offerings like Fetch TV and Bob along with content partnerships should now spread to both sets of customers. There is yet to be clarification around any staff redundancies that may arise as an overlap of skills across the companies.
As a previous customer of both companies, I believe there is real parallels between the two and potential for them to compete with Telstra’s Bigpond for the top spot. Competition ultimately benefits consumers with prices being driven down and features up, but reducing the number by one is unlikely to have major impacts on local competition.