As more Australians shift to services offered under the National Broadband Network (NBN), comparison Web site, WhistleOut, pointed to five likely strategies that Internet service providers (ISPs) will put in place to gain a larger share of the market.

Cameron Craig, director of WhistleOut, said the five strategies are: exclusive content, Internet/Internet protocol TV (IPTV)/entertainment, multiproduct bundling, price competition, and services and incentives.

WhistleOut had previously compared the prices of ISPs on NBN and found that it is comparable to ADSL prices and often even cheaper in terms of speed and per Gigabyte price.

Offering exclusive content is an incentive for Australians to pay a premium price with ISPs, Mr Craig said. Among the ISPs that have exclusive content are Telstra which offers full replays online of all Australian favourite sports and Vodafone which will make available cricket games on mobile phones.

For IPTV, Mr Craig said it is still on its infancy stage, but he predicts it will grow fast when the NBN backbone is running. He cited the case of the U.S. where Web video services such as Netflix and YouTube account for 37 per cent of all Internet traffic volume.

Mr Craig said that although Netflix is not yet available in Australia, by 2020 the country would have access to similar services video and TV-on-demand services would likely exceed half of the Internet traffic by that time.

The third strategy would be the provision of quadruple bundles for mobile phones, broadband, wireless broadband and IPT. He said ISPs that has a cellular phone subscriber base, by bundling prices, could offer lower prices on broadband plans which standalone broadband providers would find difficult to match.

"Those ISPs that can bundle can make a combined margin from a customer, whereas a standalone provider can only make a margin on the broadband plan and needs a price point that gives a margin to survive," Mr Craig explained.

The good news for consumers is that with the NBN, ISPs would go bargain basement and offer rock bottom prices. Mr Craig pointed out that TPG/Dodo has offered extremely low prices and others would likely follow.

The last strategy of services and incentives would be the differentiating feature among ISPs. Instead of lowering price tags to rock bottom level, some ISPs such as Optus build its strength by offering bundled mobile phone services to spread profit margin, while recovering across the two products and even appearing cheaper than iiNet.

"It's a long game, and if Telstra undercut Optus in any way on NBN plans with a future announcement, expect a price update from Optus a few days later," Mr Craig forecast.

NBN Chief Executive Mike Quigley announced on Tuesday that he inked $635 million contracts to equip the $36-biillion NBN with high speed service for Australian homes and businesses. Quigley said the deal balances preference for locally made equipment with costs.

Thus, of the six equipment provider, two - Madison Technologies and Warren & Brown - are Australian-owned and operated firms.

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