Why iiNet Buying Internode Makes Me Sad

iiNet is buying Internode. The plans won't be changing, no-one is expected to lose their job in the short term and the two companies have very similar approaches. So why does this development still make me a little bit sad?

Shortly after the news first broke that Internode was to become part of iiNet, my fellow scribe Adam Turner tweeted his immediate reaction:

I, for one, welcome our new @iiNet overlords. Could be a *lot* worse for @Internode customers

It's very hard to argue with that. Internode founder Simon Hackett wanted Internode to partner with/get bought out by someone in an ever-consolidating market that's about to see radical change via the NBN. In those circumstances, iiNet is easily the best alternative by some distance. Both companies are well-regarded for their customer service, an area where ISPs generally rank somewhere between barely adequate and inciting murder. Plans from iiNet and Internode, while not the outright cheapest on the market, are still good value and offer a great range of extras like unmetered content. The two former rivals are invariably the main contenders when it comes to Lifehacker's annual reader-voted Best ISP award, and while Internode has generally won, voting has always been extremely close.

Thinking of the other potential buy-out candidates is enough to send a shiver down my spine. TPG would have reduced some plan prices and then have sacked most of the support staff. Dodo would have made embarrassing TV commercials. Optus would have spent all its time suggesting Internode customers bundle as many products as possible. Telstra would have raved about the importance of customer service but then forced every person who rang to talk to a dozen people before anything was achieved, and then got it all wrong anyway.

By comparison, iiNet is a genius choice of partner. I've wandered through the headquarters and support centres of both companies, and the similarities are pronounced. The big worry online is whether Internode will maintain its existing customer service team, and right now that's the plan. Indeed, because some customers currently on Telstra-wholesaled lines will be shifted to iiNet exchanges, the ability to fix issues when they actually arise will improve.

The perils of the market

It was while I was on the conference call yesterday where iiNet's CEO Michael Malone and Internode's Hackett discussed the deal that it became clear to me why the shift really made me sad. Listed companies are just no fun. iiNet has been listed since 199, but Internode, until now, has been privately held, with Hackett owning the vast majority of the company.

But now Internode is in the dull world of the ASX. During the call, I was the only journalist who asked about the impact on customers. We had question after question about debt levels, buyout terms, sources of financing and all that kind of accountancy stuff. I appreciate that business journalists need to find out about this stuff, but it made me glad that I don't have to do that any more.

It also made me realise that some of the fun stuff that Internode has been able to do as a privately-held company is probably going to vanish in the future. I don't imagine the Node Ponies are about to get slaughtered, and I'm hoping that the free Wi-Fi at Adelaide and other airports won't get killed. But any plan to extend that to other airports will now have to be approved by a full company board, and that just makes some things less likely.

Change and consolidation are inevitable. I'm an Internode customer but on a Telstra line, so it seems possible that I'll be an iiNet customer at some point in the future. I can certainly live with that. It just won't be quite the same.


    "Listed companies are just no fun. iiNet has been listed since 199,"
    But you have to admit, there have got to be advantages to being with a company with that many years experience... ;)

    I heard that back in 199 iiNet developed the first fibre to the home networks. Admittedly the fibre was a string between two cans.

    I can't say I'm too happy with this. I used to be with Netspace, who use iinet's network, and it is complete balls where I live. I was supposed to get 1.5mbps speeds but only ended up getting 0.2mbps and there was nothing I or Netspace could do about it.

    Then I moved to Internode, who use Telstra's network and I'm on a cool 8mbps. There's no way in hell I'm going back to getting roughly 1/7th of the speed I'm supposed to get. It was good while it lasted, Internode :(

    oh boy, there's no iinet exchange here for 30km or so; wonder what that'll mean for customers like us. certainly not a deal i'm happy with yet!

      was there any internode exchange near you?

      Can't see how that might be a problem, as far as I know Agile DSLAMS are located in Telstra exchanges, so if you are already on a Telstra Wholesale port through Internode, no problem, you will be churned to iiNet, and if you are on an Agile DSLAM, well, that will continue for the foreseeable future

    x2 sadly missed, yes, the privately held thing with internode was always pretty good-- especially as it gave us some good leverage, and ability to step on toes and get away with it here in South Australia that we wouldn't have had otherwise.. Phoenix anyone?

    Gotta wonder when Adam will be welcomed into the ever expanding bosom of iiNet too! As an absolute minnow nationally (servicing only SA/NT), if Internode don't think they can survive in an NBN world, I can't see how Adam can possibly think they can survive!

    Hope this goes better than when OzEmail bought Camtech....

    Sigh. I'd like to believe the PR spin that "nothing will change" but experience has taught that this is rarely the case in mergers/buyouts. My credit union, who used be top of pops for service, has merged with others on half a dozen occasions in the past 10 years always assured customers each time that it would result in better service and more services -- in reality, each time it's been precisely the opposite. Less personalised service, higher interest rates, longer phone queues and more difficult approvals for everything.

    I'd like to be proven wrong this time, but I've learned to be cynical.

    Internode has been a unique breath of fresh air in this country for first rate products and top of the world for service. I can think of no one else in any industry that delivers customer service like these folks do. It would be a tragedy to see it dissolved.

    While competitors whinge about how difficult it is to deliver good service in the complex environment of IP networks and tell you about all the reasons why their service and products are poor, Internode have demonstrated unequivocally that it can be done and it can be done well.

    iiNet, prove me wrong and show me that you won't destroy the best customer service organisation this country has ever seen.

    Never liked Internode since I was banned from playing on some of their servers. A dodgy mod had convinced the powers that be to install a cheat on their servers calling it an unofficial mod which was a blatant lie. When it was brought to their attention by me and about 6 other people we were told we dont care as your not customers with internode. Me and those other 6 players certainly werent convinced to be internode customers after that.

    I'm an Internode customer paying $60 p/m for 150GB on an Easy Naked plan delivered through an Optus port.

    We keep hearing that nothing is set to change in the short term, but 'short term' has obviously been strategically used in that sentence to hide the fact that changes are definitely on the 'long term' horizon.

    Internodes plans will eventually morph to more closely resemble those of iiNets. Free Usenet access will undoubtedly be axed, and we'll most likely see the introduction peak/off-peak quotas. Both of these will be an absolute shame.

    The 'short term' is merely the period during which the iiNet penny pushers will be evaluating Internodes books, and when they decide they need to increase profits of the Internodes plans the changes will come.

    Something to consider about larger companies: I have just moved to internode after being with iinet since around 2000, back then on 56k and now on adsl, iv had a good experience until recently, i noticed the difference between a smaller and larger iinet when i had to call about 20 times (a reasonable estimate) and explain the same problems to different people, i finally got resolution after 2 weeks for several account and connection problems that were not my fault, they were several separate administrative mistakes (admitted to me by iinet representative) that caused over charging,bank fees,disconnection of my internet and finally my phone. I have never seen this kind of unfortunate handling from iinet, infact i have recommended them many many times, but somewhere along the line standards have recently dropped such that i was compelled to cause myself the inconvenience of changing providers after a 10 year tenure. The question is, what changed? and my guess is cheaper (perhaps off-shore) staff and or support, but what good is that if its loosing you customers? personally id prefer to pay the extra in the knowledge my account will be handled reliably, but this is rarely the case with larger/cheaper companies.

    I had iinet for 2 weeks but my sync speed was apalling ~11mbit. After complaining several times and being made to feel like I was stupid and my A+ and CCNA certifications still meant i was merely a 'dumb consumer' customer like 99% of the world in regards to knowing what im talking about, and being told several times that "theres nothing wrong" with my sync speeds, infact they are 'excellent', naturally, I ditched them as quick as humanly possible. I kept the BoB modem as severance compensation and never payed them a cent (never will). I then got internode and now I 'magically' sync at 19.7Mbit with the same modem and pc, nothing has changed. This proves iinet were blatantly lying to me and being extremely rude by refusing to adress a problem on their end. Now to hear my ISP is being bought out by iinet i am absolutely disgusted. iinet are greedy glolbalist pigs trying to make as much money as they can whilst giving the least possible in return. I just lost my last scrap of faith in humanity. Thanks alot iinet you ****

      Oh you poor thing! 11mbps? That's outrageous! Shame iiNet! Shame! What are we? A third world country? When a person who did work experience at the local PCYC and gained 2 foundation certs in practically openbook exams tells you there is a problem with their copper line provided by a third party carrier, you damn well better listen or else!! I hope this message instigates mass-BoB burnings everywhere!

    I used to be an iinet customer and recommended them to clients. They started to have some growing pains and customer service levels dropped a bit so I churned to internode. I like internode a lot. As per the article iinet are still good but not quite as good service for me as internode. Maybe by now the growing pains have stopped and iinet is back on parity.

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