Ihug to jump ditch

Auckland-based ISP Ihug is heading to Sydney to exploit the immature Australian Internet market.

Aussie ISPs beware--Auckland's Ihug plans to "kick arse" in Sydney from January.

Australia's Internet service sector is widely perceived as being considerably less mature than its telecommunications industry and Ihug aims to exploit the gap with its own point of presence. Ihug managing director Nick Wood expects Sydney to offer "at least the same growth as we've shown in Auckland.

"The cost structure is pretty much the same as setting up a POP in Wellington," says Wood, who will decamp to Sydney for a year to run the service. "The market isn't very mature in terms of products and services. There are no national providers offering flat-rate deals and the couple of local providers who do seem to have very poor throughout--around 1.0kbit/s. We'll be coming in with a $25 monthly flat rate--and guaranteeing 3.0kbit/s."

Ihug will initially extend its developing relationship with Telstra, but Wood expects to also buy international capacity from the global carriers GlobalOne and MCI. An office has been leased and dial-in lines booked, but the core of the operation will remain in Auckland, with the helpdesk overflowing to Auckland using voice-over-frame-relay.

"Australia is certainly a much easier place to do business," says Wood. "ISDN works properly and the the telcos will run fibre to your door without even blinking. New Zealand Telecom is still trying to convince people to buy ports on their gear, but I'm sorry, I want to own my own equipment, not be some sort of content provider."

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