OntheNet - Now Offering Faster Speeds with Turbo

Saturday, 5 June 2004

by Marshall Hall

A SMALL Gold Coast company is taking on the fiercely competitive field of Internet services providers and winning.

OntheNet, founded in 1994, has grown to become the largest independently-owned Internet service provider on the Gold Coast.

Its owners say its regional customer base is only surpassed by communications behemoth Telstra.

The company is now spreading its wings and supplying broadband, or high-speed, connections for its clients.

That is not unusual - what is unusual is that it owns the infrastructure, unlike many of its rivals which hire their services on a wholesale basis from Telstra.

OntheNet owns its broadband channels, a feat only repeated by Telstra, Optus and less than a handful of other players in the Internet market in Australia.

OntheNet started small. Four young university graduates [*] opened the business in 1994.

At the outset they had troubles. Big business and many customers refused to take them seriously.

Mr Woo says their eventual success took a bit of luck and a lot of help as well as their expertise.

"We were told that there was no way, that we were just a bunch of kids," says Mr Woo.

Thankfully we received a lot of help."

After overcoming its teething problems, the company quickly grew and with the onset of the technology boom in the 1990s became the target of predators.

Australian share market listed pay-TV group Austar made a grab for the company.

The partners sold the business to Austar in April 2000. Three weeks later the technology bubble burst.

Less than two years later the founders bought OntheNet back from Austar.

Mr Woo refuses to reveal exactly how much Austar paid and how much it sold the business for 18 months later. However the difference was substantial.

"If you rent out a house and the tenants wreck it, you don't give them their bond back," says Mr Woo.

Since then the company has gone from strength the strength.

Mr Woo acknowledges OntheNet could have been more aggressive in its expansion.

"The company has always been debt free," he said. "That created a bit of a problem because we have no credit history and the banks saw us as a risk."

Mr Woo says the company now regularly receives offers for injections of capital from banks and investors but has so far rejected all the would-be suitors.

More than 120,000 Gold Coast residents and businesses will be able to use the ADSL broadband service after the completion the initial rollout, scheduled to finish next month.

"There's no doubt we could have grown a bit faster but we took a conservative approach," he says.

Nonetheless Mr Woo says the company's revenue has grown 30 to 50 per cent every year for the past three years.

Mr Woo says most of the profit the company is making is being used to fund its expansion.

"We don't live extravagant lives. We all live in the same places we started in.

Mr Woo does confess having a weakness for cars - he owns several but is not keen to talk about them. He would rather talk about the business.

END - ocr'd on 18/6/2004

[*] correction - The founders of OntheNet were a network engineer from Bond University, a researcher from the DSTC and two software engineers working on WAN networking products at Digital Equipment Corporation