DSL service provider Primus Telecom has slashed the rates of its services across Australia's five mainland capital cities by 33 per cent, in an attempt to gain a stronger and more significant hold on the small to medium enterprise and residential sectors.
Vice president and general manager of Primus Internet Ash Chopra said the decision to lower prices of its DSL service was based on growing economic and market demand within the smaller professional and residential markets.
"From an evolution point of view, it became the right thing to do," he said. "The economics are better now to enter the residential market. It is becoming a good market to be in."
Primus' focus is not only to attract new subscribers, but also to eventually move its dial up base of around 50,000 subscribers "down the path" and onto continuous broadband service.
"Early 2001, the focus was on gaining corporate customers," he said. "We're willing to break even at rates now. We see a 5-10 per cent increase in people using broadband over the next 12 months."
Primus, which increased its prices early last year, is confident it will not only manage the new price cuts, but also maintain them. Chopra says that while Primus can only barely break even on the new rates, the decision to reduce service costs is long-term. Lower DSL wholesale prices from Telstra and a general increase in awareness about broadband access are main reasons for this.
The basic HomeJet Lite consumer plan now costs $65 a month for a maximum of 500MB download. Excess data is charged at 15.2 cents per megabyte. Chopra said the decreasing cost of DSL would be a major factor in the future, saying Primus customers could expect further price cuts in the years to come.