IIN - iiNet Limited
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Re: IIN - iiNet
Whether your Mum has a big enough basement.
Seriously, there's none. You're selling a commodity.
Whether your Mum has a big enough basement.
Seriously, there's none. You're selling a commodity.
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Re: IIN - iiNet
That's not technically true. If you want to be an ISP which provides a quality, low-cost service, you need to have significant DSLAM coverage, your own private network with redundant capacity and secure bandwidth on international links (which are already pretty congested). This costs an insane amount of money to set up, and there are only a handful of ISPs in Australia which have this - the rest are resellers.
That's not technically true. If you want to be an ISP which provides a quality, low-cost service, you need to have significant DSLAM coverage, your own private network with redundant capacity and secure bandwidth on international links (which are already pretty congested). This costs an insane amount of money to set up, and there are only a handful of ISPs in Australia which have this - the rest are resellers.
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Re: IIN - iiNet
It's even worse when it comes to NBN. The overheads are a significant barrier - to a point where you can see another Telstra monopoly forming. Courtesy of Internode's CEO, Simon Hsckett:
Each 200 megabit CVC will cost 200 x $20 = $4000 per month (at wholesale, plus GST) to connect (for an effective rate of almost half a million dollars per month for an RSP connected to all 121 points of interconnect) – before a single paying customer is connected.
There turn out to be multiple ways in which this overhead generates quite irrational effective wholesale costs ‘per customer’; When I first detailed this issue in March 2011, I concentrated on the issue in terms of looking at how large a national provider had to be, before these overheads stopped being insane.
(That answer is: more than 250,000 customers need to be connected nationally before these overheads are no longer a barrier to entry for an RSP to using the NBN directly, meaning that smaller RSPs will be the permanent downstream customers of aggregators, and hence operating with worse operating costs than the larger players)
But it turns out that this is actually not the worst problem with these overheads! Courtesy of the ACCC’s 121 POI decision, another issue about ‘being too small’ has emerged – for NBNCo itself!
This new overhead problem is created not by the size of each ISP so much as by the fact that in each of these 121 sub-networks, the absolute size of the NBN itself will be very small indeed for a number of years; So small in fact that the overhead of these 200 megabit CVC’s (necessary for adequate initial customer performance) will be irrationally high for many years.
For instance, the first Greenfields areas are close to being switched on by NBNCo, and each of these is in a different ACCC determined geographic area (a different POI) and hence each will require a separate 200 megabit CVC to connect to it.
A year from now, we expect (generously) to have only a few hundred houses capable of being connected, in total, for all RSPs, in each of these greenfields areas.
The issue is then that even if a retail provider managed to capture, say, 10% of the entire market in these areas, that means 10% of (say) only around 200 homes at best, implying that the CVC will be serving only about 20 customers.
(Of course, if one ISP managed to become 100% dominant, it’d do far better in effective terms – and this fact illustrates the falsehood of government and NBNCo assurances that the pricing model doesn’t have volume discounts in it. It very much does have them – embedded in the capacity of a larger or dominant player to work through these overheads faster than a smaller player).
It's even worse when it comes to NBN. The overheads are a significant barrier - to a point where you can see another Telstra monopoly forming. Courtesy of Internode's CEO, Simon Hsckett:
Each 200 megabit CVC will cost 200 x $20 = $4000 per month (at wholesale, plus GST) to connect (for an effective rate of almost half a million dollars per month for an RSP connected to all 121 points of interconnect) – before a single paying customer is connected.
There turn out to be multiple ways in which this overhead generates quite irrational effective wholesale costs ‘per customer’; When I first detailed this issue in March 2011, I concentrated on the issue in terms of looking at how large a national provider had to be, before these overheads stopped being insane.
(That answer is: more than 250,000 customers need to be connected nationally before these overheads are no longer a barrier to entry for an RSP to using the NBN directly, meaning that smaller RSPs will be the permanent downstream customers of aggregators, and hence operating with worse operating costs than the larger players)
But it turns out that this is actually not the worst problem with these overheads! Courtesy of the ACCC’s 121 POI decision, another issue about ‘being too small’ has emerged – for NBNCo itself!
This new overhead problem is created not by the size of each ISP so much as by the fact that in each of these 121 sub-networks, the absolute size of the NBN itself will be very small indeed for a number of years; So small in fact that the overhead of these 200 megabit CVC’s (necessary for adequate initial customer performance) will be irrationally high for many years.
For instance, the first Greenfields areas are close to being switched on by NBNCo, and each of these is in a different ACCC determined geographic area (a different POI) and hence each will require a separate 200 megabit CVC to connect to it.
A year from now, we expect (generously) to have only a few hundred houses capable of being connected, in total, for all RSPs, in each of these greenfields areas.
The issue is then that even if a retail provider managed to capture, say, 10% of the entire market in these areas, that means 10% of (say) only around 200 homes at best, implying that the CVC will be serving only about 20 customers.
(Of course, if one ISP managed to become 100% dominant, it’d do far better in effective terms – and this fact illustrates the falsehood of government and NBNCo assurances that the pricing model doesn’t have volume discounts in it. It very much does have them – embedded in the capacity of a larger or dominant player to work through these overheads faster than a smaller player).
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Re: IIN - iiNet
That's the way they have it planned now. If it comes to be that way, that's a better argument for big ISPs. Don't hold your breath though - it will be changed before NBN is complete.
That's the way they have it planned now. If it comes to be that way, that's a better argument for big ISPs. Don't hold your breath though - it will be changed before NBN is complete.
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Re: IIN - iiNet
I'm not sure exactly. I don't think there is any good way to estimate it either; it would depends a lot on your quality vs costs tradeoffs (how much redundancy is in your network, how much international bandwidth do you commit to, how well is your network engineered), how much suppliers like Telstra charge these days (as you would need to put your equipment in relevant exchanges), etc.
I'm not sure exactly. I don't think there is any good way to estimate it either; it would depends a lot on your quality vs costs tradeoffs (how much redundancy is in your network, how much international bandwidth do you commit to, how well is your network engineered), how much suppliers like Telstra charge these days (as you would need to put your equipment in relevant exchanges), etc.
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Re: IIN - iiNet
As a guesstimate, would you say $1m/$10m/$100m/$1b is closer? Obviously if it's the two last numbers there is some barrier to entry, not so much with the first two.
As a guesstimate, would you say $1m/$10m/$100m/$1b is closer? Obviously if it's the two last numbers there is some barrier to entry, not so much with the first two.
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Re: IIN - iiNet
I cannot guess, I simply to not know how much it costs to create a network of that scale. I would think to the higher side of those figures.
It also depends on the size of your private network as an ISP and how much cherry picking you want to do as opposed to covering a broader area.
I cannot guess, I simply to not know how much it costs to create a network of that scale. I would think to the higher side of those figures.
It also depends on the size of your private network as an ISP and how much cherry picking you want to do as opposed to covering a broader area.
So_Cynical
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Re: IIN - iiNet
Ok back on track...the IIN SP has held up very well over the last 2 weeks, the chart shows falling volumes and some sideways consolidation coming into the ex dividend date, surprisingly similar chart pattern to the last bottom that also coincidently was around ex dividend date.
~
Ok back on track...the IIN SP has held up very well over the last 2 weeks, the chart shows falling volumes and some sideways consolidation coming into the ex dividend date, surprisingly similar chart pattern to the last bottom that also coincidently was around ex dividend date.
~
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So_Cynical
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Re: IIN - iiNet
iinet had a good day today up around 9%
on the back of the Telstra NBN vote and TPG's (almost) substantial holder revelation...a merger/take over could be on the cards at some point, it could be a good model...iinet being the premium brand and TPG for the masses.
Anyway i figured out the cost base for my iinet shares from the Amcom distribution is $1.36 CPS so my average price per IIN share is now $2.14 making today's close of 2.51 look really sweet for me.
I'm back baby!
~
iinet had a good day today up around 9%
on the back of the Telstra NBN vote and TPG's (almost) substantial holder revelation...a merger/take over could be on the cards at some point, it could be a good model...iinet being the premium brand and TPG for the masses.Anyway i figured out the cost base for my iinet shares from the Amcom distribution is $1.36 CPS
so my average price per IIN share is now $2.14 making today's close of 2.51 look really sweet for me.I'm back baby!
~
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So_Cynical
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Re: IIN - iiNet
Out today at $2.59 for a 14% profit...i did want to hold for the next big leg up but the way sentiment is at the moment that big leg up could be a long way away.
As per usual ive left the profit in with about 25% of my original capital as a long term hold, works out well because with my other parcel i have from Amcom my average price has actually fallen, so my yield (ROC) has gone up.
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I also reckon that the ACT buy was a great deal...its a very good, compensative, quality cable based network that they have down there...and i would imagine a whole new customer base for iiNet, so all new money.
Out today at $2.59 for a 14% profit...i did want to hold for the next big leg up but the way sentiment is at the moment that big leg up could be a long way away.
As per usual ive left the profit in with about 25% of my original capital as a long term hold, works out well because with my other parcel i have from Amcom my average price has actually fallen, so my yield (ROC) has gone up.
------------
I also reckon that the ACT buy was a great deal...its a very good, compensative, quality cable based network that they have down there...and i would imagine a whole new customer base for iiNet, so all new money.
So_Cynical
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Re: IIN - iiNet
Turns out the above was the big leg up...and i took profit way to early.
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Anyway Today iiNet have announced that they have done a deal to buy Internode, for those that don't know, Internode is Australia's largest privately held ISP and considered to be the best ISP in the country...Node have a large customer base centred on SA, they also have a substantial fibre east coast network with switching gear etc and there own DSLAM's in Telstra exchanges nation wide.
iiNet buying Internode is a big deal....and clearly cements IIN in the number 2 provider position with daylight 3rd.
https://blog.iinet.net.au/iinet-sets-place-christmas-dinner-table-member-family/
http://www.zdnet.com.au/iinet-to-buy-internode-339328517.htm
http://forums.whirlpool.net.au/forum-replies.cfm?t=1835523
Turns out the above was the big leg up...and i took profit way to early.
------------------
Anyway Today iiNet have announced that they have done a deal to buy Internode, for those that don't know, Internode is Australia's largest privately held ISP and considered to be the best ISP in the country...Node have a large customer base centred on SA, they also have a substantial fibre east coast network with switching gear etc and there own DSLAM's in Telstra exchanges nation wide.
iiNet buying Internode is a big deal....and clearly cements IIN in the number 2 provider position with daylight 3rd.
https://blog.iinet.net.au/iinet-sets-place-christmas-dinner-table-member-family/
http://www.zdnet.com.au/iinet-to-buy-internode-339328517.htm
http://forums.whirlpool.net.au/forum-replies.cfm?t=1835523
Garpal Gumnut
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Re: IIN - iiNet
You are not Robinson Crusoe on that SC.
Did the same.
gg
Turns out the above was the big leg up...and i took profit way to early.
------------------
Anyway Today iiNet have announced that they have done a deal to buy Internode, for those that don't know, Internode is Australia's largest privately held ISP and considered to be the best ISP in the country...Node have a large customer base centred on SA, they also have a substantial east coast network with switching gear etc and there own DSLAM's in Telstra exchanges nation wide.
iiNet buying Internode is a big deal....and clearly cements IIN in the number 2 provider position with daylight 3rd.
https://blog.iinet.net.au/iinet-sets-place-christmas-dinner-table-member-family/
http://www.zdnet.com.au/iinet-to-buy-internode-339328517.htm
http://forums.whirlpool.net.au/forum-replies.cfm?t=1835523
You are not Robinson Crusoe on that SC.
Did the same.
gg
So_Cynical
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Re: IIN - iiNet
iiNet closed today at a near 7 year high of $3.44 ~ Its been a pretty amazing run up from the last significant bottom in August last year when i brought in at $2.25 ~ a 52+ % turn around in 12 months, add in the 2 dividends and the return is close to 60%
Reading back over some announcements and looking at the corresponding SP drops on the 10 year chart its interesting to note that every time there has been a sell off in IIN over the last decade the SP has gone on to make very solid gains, making IIN a great candidate for buying low and selling high.
Also interesting to note that in early 2005 they traded at $3.75 and shortly afterwards issued 28 million shares (to total 109M) at $3.05 then the SP promptly crashed after some accounting irregularly's lead to a 2 month trading suspension..a disaster it would appear, IIN traded at around 80 CPS for a while...turned out it really was just an error or 3 (no biggie) and actually an amazing investment opportunity.
IIN now has 152 Million shares on issue...so if the SP sees $3.75 again in the next few months it will be an amazing new all time high...considering the shares on issue 8 years ago.
10 year chart below.
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iiNet closed today at a near 7 year high of $3.44 ~ Its been a pretty amazing run up from the last significant bottom in August last year when i brought in at $2.25 ~ a 52+ % turn around in 12 months, add in the 2 dividends and the return is close to 60%
Reading back over some announcements and looking at the corresponding SP drops on the 10 year chart its interesting to note that every time there has been a sell off in IIN over the last decade the SP has gone on to make very solid gains, making IIN a great candidate for buying low and selling high.
Also interesting to note that in early 2005 they traded at $3.75 and shortly afterwards issued 28 million shares (to total 109M) at $3.05 then the SP promptly crashed after some accounting irregularly's lead to a 2 month trading suspension..a disaster it would appear, IIN traded at around 80 CPS for a while...turned out it really was just an error or 3 (no biggie) and actually an amazing investment opportunity.
IIN now has 152 Million shares on issue...so if the SP sees $3.75 again in the next few months it will be an amazing new all time high...considering the shares on issue 8 years ago.
10 year chart below.
~
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Re: IIN - iiNet
No objections about being a great company, but I can't say that I'd ever buy a company 'regardless of share price'.
No objections about being a great company, but I can't say that I'd ever buy a company 'regardless of share price'.
So_Cynical
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Re: IIN - iiNet
Seconded.
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IIN got to $3.65 today, closing in on a new all time high...goes XD in 8 days time.
Seconded.
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IIN got to $3.65 today, closing in on a new all time high...goes XD in 8 days time.
Re: IIN - iiNet
Still going strong opening at $4.26 today.
They just secured a syndicated debt facility backed by Westpac, ANZ, NAB and CBA for $330M. So one would hope they aren't going to issue any new shares soon.
So where to now? I'm going to do some more research and see how they are doing increasing their market share especially with Telstra going through a restructure which should provide some more fight going forward. One would think eventually iiNet, Telstra, Optus and TPG are going to acquire all the small guys and the majority of the broadband market will sit in 4 ISPs.
Still going strong opening at $4.26 today.
They just secured a syndicated debt facility backed by Westpac, ANZ, NAB and CBA for $330M. So one would hope they aren't going to issue any new shares soon.
So where to now? I'm going to do some more research and see how they are doing increasing their market share especially with Telstra going through a restructure which should provide some more fight going forward. One would think eventually iiNet, Telstra, Optus and TPG are going to acquire all the small guys and the majority of the broadband market will sit in 4 ISPs.
So_Cynical
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Re: IIN - iiNet
I remember reading a detailed story of why Simon Hackett sold Internode to IIN, in a nut shell he said that due to the new NBN wholesaling arrangements and cost structure, Internode couldn't compete with the bigger players (IIN Optus and Telstra) so he felt he had to sell into one of them and IIN was the best choice.
There seem to be industry wide consensus that there will be no more than 4 major providers due to the minimum NBN access charges per provider...so IIN is now pretty much cemented into a telephony/internet/data quadopoly.
I remember reading a detailed story of why Simon Hackett sold Internode to IIN, in a nut shell he said that due to the new NBN wholesaling arrangements and cost structure, Internode couldn't compete with the bigger players (IIN Optus and Telstra) so he felt he had to sell into one of them and IIN was the best choice.
There seem to be industry wide consensus that there will be no more than 4 major providers due to the minimum NBN access charges per provider...so IIN is now pretty much cemented into a telephony/internet/data quadopoly.