Born in Sydney in 1972, Ashton always had an interest in computing. "I got my first Compaq portable with 10-inch green screen in 1983 — a big white box that I loved to play with as a kid. I was always tinkering with it, trying to gain an understanding of how the technology worked," he recalls.
After finishing high school at Sydney Grammar in 1989, Ashton completed a physics, chemistry and applied mathematics degree in 1992. He then commenced a law degree, which after about a year he decided was not for him, though he did later complete a Master of Commerce degree.
His appetite for business and technology had already been whetted by a part-time job he had taken at uni. "I was working on data collection systems in the IT department of a printing company called Diamond Press. It allowed me to indulge what was rapidly becoming a passion for two things — IT and commercial challenges," Ashton says.
Business opportunities
This led to Ashton thinking of his own business possibilities, and less than a year later, he and three school friends hit on an idea. "We all had an interest in the internet, long before it was the World Wide Web. In 1993, it basically consisted of Unix stations and bulletin boards. The only real online services being offered at the time were in programs such as freeware and shareware," Ashton says. At about the same time, Australia’s first ISP, OzEmail, was in the throes of launching.
Ashton and his friends realised there was an opportunity to offer higher-speed internet services to businesses primarily in Sydney’s CBD. They wrote a business plan and, with $100,000 in funding from family and friends, founded Magna Data with 12 14/4 modems hooked into a serial bus. "We plugged it into an SCO Unix box, which was a glorified 486 PC running at 266MHz, which was the fastest thing we could get our hands on back then."
They needed more modem lines and got one into one of the founder’s apartments, then lobbied AARNET and the AVCC (Australian Vice Chancellor’s Committee), which, Ashton says, was the only internet source in Australia at the time. "Telstra didn’t even have an internet connection available for us then," he says. They managed to get an ISDN connection provisioned from Telstra, though they then had the added problem of getting it from Sydney to Melbourne University to share with dial-up modem users.
Rapid growth
Charging about $35 a month, Ashton and his colleagues had the grand vision of signing up around 500 customers within two years. "What we actually achieved was over 3000 [customers] within the first six months," he says. This, Ashton says, was achieved by being able to innovate and offer internet speeds which, "long before broadband as we know it existed, were highly competitive".
Magna Data started offering services at 28Kb/s, then quickly moved to 56Kb/s when the faster modems were released onto the market, before provisioning ISDN lines and graduating to 128Kb/s.
By early 1994, Magna Data had eked out a respectable share of the burgeoning ISP market, along with other pioneers such as OzEmail, connect.com, IInet in WA and a few other smaller providers.
"We made a decision quite early on in the piece to pitch to business. We were not a big brand name, so we had to go and pound the pavement to differentiate ourselves as the serious business alternative," Ashton says. "Within four years, we had signed up virtually all the major law firms, major banks and Fairfax, whom we helped to build the Sydney Morning Herald website in 1995 with a lot of HTML coding.
In 1995, two years before the telecommunications industry was deregulated, Magna Data tested HDSL lines. They were also using Telstraprovisioned lines from their office to other offices. "Telstra would put copper together between exchanges — a piece of copper which ran all the way from point A to point B. We put an ADSL modem on top of that. However, because we could not actually go into Telstra’s exchange, we put HDSL over Telstra copper. They weren’t very happy about that and threatened to change the rules," Ashton says.
Starting in 1996, Magna Data was one of the first ISPs to offer a 2MB HDSL service (both ways) for $1000, seriously undercutting Telstra by using their copper and targeting the services to the business community, Ashton says.
Tidy profit
By early 1999, Magna Data had close to 10,000 dial-up customers and a core of more than 2000 high-quality SMEs and corporates using their HDSL services. Their turnover was close to $10 million a year and their staff number had grown to around 65.
In April of the same year, Ashton and his partners decided to cash out, selling the company to Davnet for just shy of $20 million. Magna Data later got segmented out to Davnet Communications, which was later segmented off to NTT when it invested in Davnet in December, 1999.
"We were pretty green, but we learnt a lot in a very short space of time, competing against the likes of Telstra. By the time we sold the business the market had become very competitive," Ashton says.
"The biggest problem that a PowerTel or Magna Data is ever going to face is the fact that you have to buy last mile circuit from your largest competitor. As the incumbent monopolist, it is obviously in their best interest to make it as difficult as possible for you to succeed," Ashton says. "Moving away from Telstra meant no DSLAMs and no local loop."
There was also the appeal of being able to deliver a cutting-edge wireless network service in a market which Ashton says was crying out for such a service. "Being a wireless operator you can develop network infrastructure very quickly. It takes only three days to build a base station with a 10km radius, which works out at around 300 square km in coverage area," Ashton says.
At the end of 2001, Ashton and Choi wrote a business plan for what was to become BigAir Group, and started with their own seed money by building two base stations in the inner city Sydney suburb of Ultimo in May 2002. They obtained a carrier licence in October 2002, before launching commercial services, aimed principally at the business sector in broadband black holes where no ADSL or cable services are available.
Full launch
A full launch followed in March 2004, once BigAir had built out enough footprint, with six fully functional base stations. This was preceded by a considerable amount of R&D and testing.
"Wireless is not a simple technology. The challenges faced are far more complex than other types of broadband, where you can simply employ good Cisco engineers to build a network. There are very few people in Australia with wireless networking skills," Ashton says.
At launch, BigAir had just six staff, due, Ashton says, to the fact that it is not an employee-intensive network. By focusing on the business market, Ashton says BigAir could deal with IT managers that generally have a much higher level of understanding than the mums and dads market. "By dealing primarily with the business market, we have been able to dramatically reduce our service and support load. We also own our network end-to-end, without having to spend all day liaising with Telstra," Ashton says.
Since launch, BigAir has built its high-speed broadband network to cover roughly 50 percent of the Sydney metropolitan area, concentrating mainly on areas of highest business location density such as business parks. A further 50 percent of the uncovered area would be covered within a year, Ashton says.
Range of services
BigAir currently offers a range of highspeed fixed wireless broadband services, which has allowed it to compete with corporate frame relay services offered by the major telcos, at speeds of up to 100MB/s. It also offers a bundle of valueadded services including business-grade VoIP, and co-location services.
In addition, BigAir has an agreement in place with fellow wireless provider Commander through its iBurst roaming service, which uses a card plugged into a laptop and gives the user internet access over most of Sydney.
BigAir also recently completed the acquisition of mobile and portable wireless service provider Veritel Wireless, to complement its fixed wireless service. Veritel currently services more than 4000 business and residential customers using its wholesale network partners, iBurst and Unwired.
Ashton says the acquisition of Veritel had allowed BigAir to provide a comprehensive range of wireless broadband services to the business market.
"Along with our existing voice and data services, which we offer over our own fixed wireless network, we can now also offer mobile and portable wireless broadband services for laptop users when roaming outside the office. We intend to bundle these services and cross-sell them across our expanded customer base."
ASX listing and channel program
BigAir also plans an IPO later this year, which Ashton says would provide funding to expand the business into other metropolitan markets. This would likely involve a network build out in Canberra initially, followed by Melbourne and Brisbane, he says.
"What we want to do is greatly extend the coverage of our network and also increase the sales and marketing activity for all of our wireless broadband services," he says.
BigAir is planning to list on the ASX on 8 December. Its market capitalisation at the offer price of 25 cents per share will be $23.5 million.
Ashton says the company also planned to launch a channel program after the ASX listing, which will include the appointment of a channel manager. "We haven’t got a very well developed system at the moment. We also have a very under-utilised network and are looking to work with suitable partners, be they system integrators, network integrators or others with good existing customer relationships, to provide high-quality communications packages and integration work on anything from PSTN to full VoIP systems," he says.
Bright future
As far as Ashton is concerned, wireless internet services are set to undergo an explosion in uptake similar to that experienced by mobile phone services in the 1990s. "Right now we are roughly at the same stage that the mobile phone industry was at in the mid-to-late 1980s," Ashton says. He adds that, at that time, the handsets were unwieldy and the networks unreliable, but the phones got smaller, digital was introduced and the services became more affordable. Now mobile subscriptions outweigh those of fixed line.
Wireless broadband, he claims, is headed down the same path. "Wireless will be the preferred form of broadband internet access within 10 years," he says. "If it gives you the same level of performance as ADSL or cable and you can take it with you without inconvenience, why wouldn’t you want to take up a wireless service?"
Looking back over his career to date, Ashton says he had derived a great deal of satisfaction from watching his businesses come to life, "especially when you know its your own network you have built from the ground up".
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