iiNet confirms head office staff cuts

Perth-based service provider iiNet (ASX:IIN) has confirmed a number of redundancies have been offered to staff, largely at the company’s head office, as part of a wider review of staff structure.

In an emailed response, iiNet’s chief regulatory officer, Steve Dalby, told Computerworld Australia that the number of staff was “small” and affected personnel across the iiNet group, which now includes subsidiary providers including Netspace, Westnet and AAPT’s consumer retail division.

“As a result of our rapid growth and recent acquisitions, it is only natural that our staff structure is reviewed,” Dalby said. “It is always foreshadowed as part of the synergies gained from MA [mergers and acquisitions] activity.”

iiNet has in recent times aspired to become quot;acquirer of choice” in the ISP market, reflecting the dwindling number of smaller providers in the local market and the increased opportunities for the company as it looks to grow its assets and customer base. It became Australia’s second largest ADSL provider following the $60 million buy-out of AAPT’s retail consumer division from Telecom New Zealand in July last year.

iiNet chief financial officer, David Buckingham, said acquisitions would likely continue at the right price.

“We’re generally opportunistic when it comes to MA,” he said. “We have the financial capability and skill-set to take advantage when opportunities present themselves.”

“The acquisition of very small ISPs is not a cost effective method of acquiring customers for us – we think that most private owners have unrealistic price expectations.”

The company also intends to become the “leading challenger brand in the Australian telecommunications industry,” a point it has begun to flaunt in its latest round of marketing campaigns. Though it remains behind Optus in total broadband market share, it recently adorned a "No. 2" moniker in advertisements.

The fixed broadband market has continue to grow in recent years, accounting for approximately 5.34 million Australian subscribers according to statistics from NBN Co and used by iiNet in a financial presentation last week.

iiNet has continued to profit from the falling number of smaller ISPs but organic subscriber growth for the provider has slowed, amounting to 7000 new users during the first half of the current financial year - compared to 23,000 for the first half of the 2010 financial year - without accounting for AAPT’s retail consumer base.

The provider claims to employ 2000 staff across Australia and have 1.3 million broadband and telephony subscribers.

Follow James Hutchinson on Twitter: @j_hutch

Follow Computerworld Australia on Twitter: @ComputerworldAU

Copyright © 2011 IDG Communications, Inc.

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