Telco service bundler expands to fill the gap in medium market |
Auckland telco Digital Island Communications is going for its third consecutive Deloitte Fast 50 listing after another year of strong growth.
Digital Island was placed sixth in the last two lists, with a 553% revenue increase last year following 1071.5% in 2007 and general manager Blair Stewart said the company expected a gain of “a couple of hundred per cent" for the past 12 months.
The company supplies and installs business telephone and internet packages to medium-sized firms and this week became Telecom’s first mobile phone reseller after a three-month trial.
"We are all about bundles of services, a one-stop shop for complete packages," Mr Stewart said. "Five or 10 years ago companies cherry picked to get the best deals for products and services but now they go to just one supplier."
"Our selling points are giving average savings of 20%, which these days is very attractive, and individual service to customers."
"Most major telcos have taken their call centres offshore with a subsequent decline in service large telco clients still get the service but medium businesses, which have the same requirements, get channeled into call centres."
Mr Stewart and three schoolmate-directors started the company after an OE in the UK where he worked as IT manager for low-cost airline Easy Jet.
"We came home wanting to get into our own business and looked at the telco sector," he said. "We were surprised at the service gap in the medium market and decided to fill it, raising $3.1 million and starting Digital Island five years ago."
"We began with a value based offering as it all comes down to pricing as a formula which works and in a very competitive market you generally win customers on price and keep them with service."
"Telcos are an $8 billion industry in New Zealand and we want a couple of per cent of that while we are aiming for about 10,000 customers, or about 2% of the market. We currently have several thousand."
"Digital Island is 100% New Zealand based and owned and one of the few companies employing staff at the moment we have 20 and want another 10 in the next 18 months." Mr Stewart said the company, although growing strongly, was not immune to the recession but was dealing with it by dropping high-cost products from its range and pushing those which were more value-focused.
"We want to become a prominent player in the New Zealand telco market" he said. "The number of competitors is shrinking because the two major companies, Telecom and Vodafone, are fighting for market share and discounting across their product range, which makes conditions difficult for smaller businesses."
"They are finding it harder to compete with the two majors and are consolidating." Deloitte Fast 50 lead partner Matt McKendry said Digital Island was led by a good management team, which was getting on with building the company with shared vision and complementary skills.
"There are huge opportunities in the telco sector for small firms challenging the big boys," Mr McKendry said. "They are more agile, customer-focused and able to make more compelling offers."
"Those who succeed have a targeted customer base arid can layer extensions of service over what they are already doing which leads directly to growth."
"Past Fast 50 winners have all been very focused on clients and their needs."