Asian ISPs Acquiring Australian Counterparts

The much-anticipated “shake-out” of the
700-strong ISP industry in Australia has not
materialised, but several Asian providers are engaging in acquisitions of
mid-tier Australian ISPs.

Pacific Internet is the latest to
engage in the practice of growth by acquisition. It has bought Zeta
Internet, based in Sydney, and Hub Communications of Brisbane. Zeta’s
history stretches back to 1985, while Hub was started four years ago.

The acquisitions will add 7,000 users to Pacific’s existing clientele, which
is based almost exclusively on its previous buy-outs of Zip World and Mira
Networking, two other medium-sized ISPs based in Sydney and Melbourne
respectively. Pacific said it intends to announce further ISP deals next
year.

“These purchases push forward our strategy to merge smaller and mid-size
ISPs into our group firmly positioning Pacific Internet as a major force in
the Australian Internet market,” said Peter Knox, general manager of
Pacific.

NASDAQ-listed Pacific was only launched in Australia in July, although it
was started in 1995 in Singapore and has offices in Hong Kong and the
Philippines.
The company has taken the unusual step of opening bricks-and-mortar retail
stores, in Northland Shopping Centre in Melbourne and Parramatta Shopping
Centre in Sydney.

Another Asian ISP to cut a swathe through the local market has been Asia Online, which has acquired
seven small- to mid-sized Australian providers in the last quarter of 1999
(see
story).

The general pattern of the acquisitions has been to cover all of the major
regional cities. Asia Online now covers all of the capital cities except
Darwin and Hobart, and Pacific Internet said it was “also looking for ISPs
in regional areas in a market already feeling the effects of consolidation
by the major players”.