iPrimus dances with Telstra on ADSL2+

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iPrimus dances with Telstra on ADSL2+

ISP iPrimus has all but given up on building new DSLAMs in the wake of the NBN announcement, opting instead to quadruple its coverage area for ADSL2+ via a resale deal with Telstra.

The ISP announced this morning that it can now offer ADSL2+ services through a total of 1500 exchanges.

iPrimus has rolled out its own ADSL2+ services in 286 DSLAMs, but found it difficult to cover several key metropolitan areas.

The ISP will be now be able to offer ADSL2+ services to some 80-100 per cent of Western metro Melbourne for example, whereas it could only serve around 50 per cent of the area with its own DSLAMs.

Andrew Sims, general manager of products and marketing at iPrimus said its not necessary for the ISP to continue rolling out DSLAMs in the wake of the NBN announcement.

"Unless you can get a two or three year payback on an exchange, its not really worth it," he said. "The DBCDE is suggesting parts of the NBN will be rolled out before then."

Sims said it is unlikely many ISPs are rolling out DSLAMs at present. "I certainly wouldn't take that risk," he said. "You'll find a lot of ISPs are winding down their investments. Internode and iiNet might still be rolling them out, but its only to meet a schedule they set from last year."

Sims says the wholesale cost of offering a Telstra ADSL2+ service is "pretty significant", so much so that iPrimus has to offer resale services at "almost double the price" of services from its own DSLAMs.

iPrimus offers ADSL2+ plans from its own exchanges for as little as $32.95 per month, he said, whereas the best price iPrimus can manage reselling a Telstra ADSL2+ service is $69.95 per month.

Sims says Telstra's wholesale pricing presents a challenge in how the ISP goes to market.

"We will start with existing [ADSL] customers, talking to them about upgrade paths," he said. "Then we'll be looking at a marketing campaign that specifically targets those areas where we don't have our own exchanges."

Sims doesn't play down the difficulty iPrimus faces when one considers the ISP is dominant in the Eastern suburbs of Melbourne but not so in Western suburbs - customers in neighbouring suburbs will be offered completely different prices.

"That's unfortunately the cost structure we are looking at here," Sims said. "That's the nature of doing business with the devil."

Existing ADSL customers will be offered "free upgrades" to ADSL2+, the company said.

The $69.95 entry-level plan includes 6GB of data, while the ISP will continue to offer its 'Big Kahuna' plan, which offers a whopping 200GB of data.

Sims said strategically, the ISP is looking to use the resale agreement with Telstra to give it access to customers that will experience "a taste for higher speeds" before the National Broadband Network is built.

"It provides us an ability to talk to the customer when the NBN, in what ever form it takes, comes on board," he said. "We'll be able to say, do you want to go even faster?"

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