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New NBN ISP: There's still room for fresh national broadband providers to compete

Australian Broadband Services (Ausbbs) plans to launch in August on a trial basis and eventually become one of the top 10 ISPs in Australia.

New ISP, Australian Broadband Services (Ausbbs), is confident there is still opportunity for companies like itself to compete on a national scale.

According to Ausbbs, it will be the first "National Broadband Network (NBN) generation ISP" to launch in 2012. The ISP plans to provide low cost broadband services for customers and release new high-bandwidth products that will complement the NBN.

Planned services include fixed-line broadband, wireless broadband, Voice over IP (VoIP), mobile plans, data storage, cloud computing, IPTV, and home security solutions.

In the 90s, Ausbbs CEO, Rob Appel, was an employee of OzEmail, an ISP which Shadow Communications Minister, Malcolm Turnbull, was formerly the chairman of. OzEmail was acquired by iiNet in 2005.

With the OzEmail experience under his belt, Appe began to explore last year, putting together a business plan and a team eight months ago.

The business model for Ausbbs centers on variable costs, low fixed costs -- including wages -- as well as securing services from third-party suppliers.

Ausbbs will be offering NBN services through an unnamed wholesale aggregator and its local customer support will be done through another company.

"We are at a position where we can say we are commencing the build and are aiming to launch on a trial basis in August," Appel told ARN.

At the Communications Day Summit in Sydney last week, Internode managing director, Simon Hackett, said it was too late for new national ISPs to compete in the market.

"... It is too late, in my view, to become national from scratch and if you do become national you will be doing it essentially by reselling one of the other four guys' products," he said. "But for regional players, they are perfectly sustainable.

While Appel understands where Hackett is coming from, he was optimistic about opportunities NBN presents for new national players like Ausbbs.

"We are competing at a different level of the market, just in the retail space and not competition in infrastructure or wholesale," he said. "... For us, the NBN is a huge opportunity to compete without buying wholesale from competitors like Optus and Telstra."

There are currently less than 10 people employed by Ausbbs and Appel wants to keep staff levels low as part of the cost-cutting strategy.

So far, less than 100 people have registered interest in signing up with Ausbbs for a three-month trial commencing in August. But the company's CEO stressed it has kept under the radar for the most part and expects additional expressions of interests as it garners more publicity.

The goal for Ausbbs is to eventually become a top 10 ISP in Australia.

"As a small low-cost operator, we expect to have a small but substantial stake in the market," Appel said.

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