A new Sydney-based telecommunications company has grown its revenues from $500,000 to $30 million in just three years by providing one thing sorely missing in the internet service provider (ISP) market: simplicity.
Called Mate, the telco was founded in 2015 by twin brothers David and Mark Fazio and Jonathan Dundovic, spurred on by the rollout of the NBN and a realisation the ISP market was about to heat up.
“I’d spent the last 13 years with M2 Wholesale helping other little ISPs build their businesses, so after all that time there was an itch I just had to scratch,” David Fazio tells SmartCompany.
“NBN was the biggest change ISPs in Australia had ever seen, and customers who had been with a provider all their life thinking they’d never need to change were suddenly being told by the NBN that they would need to change, or they’d be cut off.”
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“I realised then there’d be a lot of people going around looking for new deals for the first time. The beast was waking up.”
With a clear opportunity, Fazio and his co-founders took out loans and re-mortgaged their houses to get Mate off the ground, aiming to not only capture a share of the telco market but make the whole process much less confusing for customers.
Today, Mate offers NBN, ADSL, and mobile plans, with cheap rates, unlimited data and no contracts, along with no plan change or setup fees if customers provide their own modem.
It’s a much different offering than other competing telcos who are re-selling the NBN’s services, but it’s worked for the company so far, with more than 35,000 using the service in 2018.
“We put ourselves in our customers’ shoes, and thought about what they would want compared to what the big four telcos are doing, and worked out what we could do differently,” Dundovic says.
With a blistering 3,703% three-year revenue growth, Fazio says the business has come a long way from its “oily rag” beginnings. But managing the rapid growth hasn’t been the easiest for Mate, with the founders saying they had to decide whether to scale its service management through extra hires or automated systems.
“So we made the decision to just throw bodies at it. Our motto is to treat customers how we’d want to be treated, so we didn’t want to let them down. It’s worked for us so far,” he says.
The business now has more than 50 staff in its Sydney office, and proudly keeps all its support staff local rather than outsourcing to international call centres. Dundovic says as the company grows, the potential to negotiate better deals for customers gets easier, with some of the larger clients the company has attracted hoisting its scalability.
“You’ve just got to try everything, as I figure if you’re going to fail, you may as well fail fast,” Fazio says.
Customer expectations tough
Fazio jokingly says his advice to other founders is to “not start a telco”, and the founder admits there are some unique difficulties associated with running an internet service provider.
Most of these challenges relate to managing customer expectations, which he says can vary wildly.
“While you have some challenges with dealing with the NBN, like peak-time traffic managing, the hardest and most interesting thing for me was learning how to manage customer expectations,” he says.
“They vary so much, and I think the NBN has somewhat shot itself in the foot with how it was delivered, as customers expect they can get the service connected on the same day they request it.”
In reality, lines often need technicians to install them, or to repair broken tech or damaged cables. Fazio says managing this variance when delivering customers their product has been a struggle at times.
Looking forward, the founders say Mate will likely look to expand into the energy and entertainment markets, with the goal of getting a larger share of customer wallets, and to reach 100,000 users. Growth is also still forecast to continue, with the business eyeing off $35 million in revenue by June.
“I always tell the staff that they have to have a respect for customers, as they’re the ones who pay their bills. Every customer is important, it doesn’t matter what they’re saying or doing,” Dundovic says.
“We’re also so lucky to have an amazing culture of people who work here. They give us their blood, sweat and tears — everyone here lives by the sword and dies by the sword, and we love looking after them.”