Primus aggresive rollout in Australia
afr.com.au
Primus should do VERY WELL in Australia. There's only a tired
old State-owned phone company Telstra as major competition.
Primus targets Telstra,
OzEmail in price war
By Grant Butler
Profit margins are set to get even slimmer in the already
cut-throat internet business, following Primus
Telecommunications' introduction yesterday of low-cost
access.
Launching its new Internet Primus service, the company
announced it would sell five hours of internet access for
$8.95 per month and unlimited hours for $29.95 a month
(up to a download limit of 200 megabytes).
Ad hoc rates for occasional users would be 3-4¢ per
minute, or a maximum of $2.40 per hour. That compares
to rates of around $5 for ad hoc access offered by major
players such as AOL Australia, Cable & Wireless Optus,
OzEmail and Telstra Big Pond.
"We did a lot of market research and found a big schism
between people that only used the internet for e-mail a
couple of hours a month and those that used it very
heavily," managing director of Primus Australia Mr Ravi
Bhatia said.
Mr Bhatia said Primus planned to invest more than $20
million in its internet push and saw Telstra and OzEmail
as its main competitors.
He dismissed the threat posed by AAP
Telecommunications which last week acquired the
remaining 59.9 per cent of Connect.com.au it did not
already own for more than $23 million. The company
shares Primus' plan to leverage an existing base of
residential long distance telephone subscribers when
rolling out its internet product, branded Smart Chat.
Mr Bhatia said his company would begin by directly
marketing the new service to Primus' existing base of
300,000 residential and 50,000 business subscribers.
But the services will initially be available only in Adelaide,
Brisbane, Melbourne, Perth and Sydney. The company
said it would add a further 65 points of presence -- area
codes in which customers will be able to reach the
internet with a local phone call -- in the next year.
It also remains to be seen whether Primus can deliver
satisfactory service and connectivity speeds to customers
at the aggressive price points it has set.
Primus also announced yesterday it had acquired the
remaining 40 per cent of HotKey Internet Services.
Melbourne-based HotKey, which provides internet
access, website hosting and other services, will continue
to be operated separately, the company said.
Primus paid $2 million for its 60 per cent stake in
HotKey in March 1998.
The Internet Primus network is built on a platform of
Nortel Networks routers. In addition to consumer grade
services, the company will sell xDSL, private fibre and
other high speed access links for corporate customers.
"The launch of Internet Primus in Australia is only the first
step of our global internet roll out which will position
Primus as a tier one global internet service provider," Mr
Bhatia said.
"Primus owns more than one gigabit per second of
capacity in 24 fibre optic cable systems around the
globe."
Internet Primus is part of a strategy to offer companies a
range of integrated telecommunications products, such as
local and long distance voice phone calls, mobile phone
services, data links and now internet services.
Primus is listed on the NASDAQ exchange in the United
States. With annual revenues of more than $300 million
per year, it is Australia's fourth largest carrier in revenue
terms after Telstra Corporation, Cable & Wireless Optus
and AAP Telecommunications.
The company derives about 50 per cent of its worldwide
revenue from Australia. |
