Ihug set to unveil cheaper StarNet, new TV service

The Internet Group will unveil a new version of its high-speed wireless StarNet product late next week - offering its long-promised digital TV service, much cheaper set-up and monthly fees little more than the $45 it currently charges for standard dial-up.

The Internet Group will unveil a new version of its high-speed wireless StarNet product late next week - offering its long-promised digital TV service, much cheaper set-up and monthly fees little more than the $45 it currently charges for standard dial-up.

On the back of a new marketing campaign created by the M&C Saatchi agency and a higher profile thanks - ironically - to the headlines created by the attack that destroyed thousands of Websites on its homepages server late last year, Ihug has already seen customer growth pick up this year after a flat spell.

The company will now seek to convert more of its dial-up users to the new StarNet-based service. It will be offered initially as an upgrade for existing customers, and new subscribers may have to wait until early June get service.

There are only about 1000 StarNet customers at the moment, and Ihug director Nick Wood agrees that set-up costs ranging from $500 to $800 have been a major obstacle. The revamped service, using the same rooftop dishes, but new PCI cards from a Korean company, could cost customers as little as $100 to set up, depending on the length of service contract they sign up to.

"It's going to be really cheap," says Wood. "We're making it so it's a no-brainer for people to make the decision.

"We've priced it around what we're paying for small volumes of gear, knowing that the price will change as we get more and more people buying it. We even think the soft launch is going go nuts."

But some customers have already become frustrated with StarNet installation delays and Wood admits that physically installing gear will be the most difficult part of rolling out the service.

"We're going to bring in four or five thousand units of everything so there won't be any problem with supply - it'll be the installation component that'll take a little while to ramp up. We're planning for it but that's why we'll do the soft launch first."

Nonetheless, Wood says the company is aiming to woo 20,000 customers onto StarNet in the next 12 months.

It seems customers will also be able to buy dedicated hardware for the service - either the company's "Super System" PC or a set-top box style device.

Housing for television equipment, including the $2 million video server picked up second-hand from Telecom's scuttled First Media project, has been built into Ihug's Newton Road building. A small TV production studio is also nearing completion.

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